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211-01-02+Class+22+HW15

# 211-01-02+Class+22+HW15 -...

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Issue: Auditors' Judgements -- Bases (Direct experience, Audit Judgement Basis Examine Normal Pop Assumption (sample data freq tables): Indirect experience, or a Combination) Direct Indirect Comb MIN: 13.3 Bus Ques: Does the basis for auditors' judgements result in different quality 17.0 16.6 25.2 MAX: 27.5 Construct Freq Tables of the judgements (on average)? (If so, what are the differences?) 18.5 22.2 24.0 Classes: Direct Indirect Combination Sample Data: A study compared auditors' judgements to actual results. The 15.8 20.5 21.5 15.0 1 0 0 sample results are shown by basis for the auditing judgements. 18.2 18.3 26.8 20.0 5 3 0 See columns I through K. NOTE: lower scores indicate better judgements. 20.2 24.2 27.5 25.0 1 4 3 Note that "Direct" has the best sample average quality, "Comb" the worst. 16.0 19.8 25.8 30.0 0 0 4 13.3 21.2 24.2 THIS ASSUMPTION SEEMS OK. Analysis: ANOVA 17.0 20.4 25.0 <-- sample means 1 Ha: Not all the same 2 Test statistic: (1) F = MST/MSE from anova. (2) If Ho is true, this ratio is F distributed with df1 = 2 and df2 = 21-3=18 3 Alpha = 0.05 4 Reject Ho if F > 3.555 =FINV(0.05,2,18) 5 Use the excel tool: Anova, Single Factor Examine Assumption that Anova: Single Factor Population variances equal: SUMMARY (review sample variances) Groups Count Sum Average Variance THIS ASSUMPTION SEEMS OK. Direct 7 119 17.0 5.0100 Indirect 7 142.8 20.4 6.2567 Combination 7 175 25.0 4.0100 ANOVA Source of Variation SS df MS F P-value F crit Between Groups 225.68 2 112.84 22.159 0.000 3.55 Within Groups 91.66 18 5.09 Total 317.34 20 6 Reject Ho. Bus Ans: that the basis of auditing judgements affects the mean quality rating of those It is unclear from this data whether there is a difference in average quality for Direct vs Indirect Experience as bases of auditing judgements or for the Indirect vs Combination Experience.

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