Exhibit 10-1
In an audit of the outstanding bills in a large multi-national firm, the auditor selected a random sample of 40 of these bills and recorded the dollar value of each outstanding bill.The data were analyzed using Excel (see below).

-Refer to Exhibit 10-1.Suppose the auditor wants to test,at a 1% significance level,the null hypothesis that the population mean dollar value of the outstanding bills is equal to 130.0 versus the alternative null hypothesis that the population mean dollar value of the outstanding bills is not equal to 130.0.The auditor:
A)should not reject the null hypothesis.
B)should reject the null hypothesis.
C)must collect more data before rejecting or not rejecting the null hypothesis.
D)cannot reject the null hypothesis with less than a 5% significance level.

Question

Exhibit 10-1
In an audit of the outstanding bills in a large multi-national firm, the auditor selected a random sample of 40 of these bills and recorded the dollar value of each outstanding bill.The data were analyzed using Excel (see below).
 
-Refer to Exhibit 10-1.Suppose the auditor wants to test,at a 1% significance level,the null hypothesis that the population mean dollar value of the outstanding bills is equal to 130.0 versus the alternative null hypothesis that the population mean dollar value of the outstanding bills is not equal to 130.0.The auditor:
A)should not reject the null hypothesis. 
B)should reject the null hypothesis. 
C)must collect more data before rejecting or not rejecting the null hypothesis. 
D)cannot reject the null hypothesis with less than a 5% significance level.

Quizplus · Accepted Answer

The sample mean is 131.0, the sample standard deviation is 10.0, and the sample size is 50. The test statistic is (131.0 - 130.0) / (10.0 / sqrt(50)) = 1.0. The p-value is 2 * P(Z > 1.0) = 2 * 0.1587 = 0.3174. Since the p-value is greater than the significance level of 0.01, the auditor should not reject the null hypothesis.

Exhibit 10-1 In an Audit of the Outstanding Bills in a Large