Question 1 - Assignment 1 Question 1 Auditors of a...

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Assignment 1 Question 1 Auditors of a particular bank are interested in comparing the reported value of customer savings account balances with their own findings regarding the actual value of such assets. Rather than reviewing the records of each savings account at the bank, the auditors decide to examine a representative sample of saving account balances. a) Select a systematic sample of 151 saving accounts. To draw a systematic sample of 151 accounts from 2512 accounts use the TRUNC function of excel to get the sample interval. Next, use the RANDBETWEEN function to find the sample at a interval of 16 and then freeze the values by copy, paste and paste special. To get the respective balances of the customer use the VLOOKUP function on the whole column. Savings Account Balances for Customers of a Given Bank Frame Size 2512 sample size 151 Sample Interval 16 Index Systematic Sample Balanc e 1 11 3828.8 2 27 1503.4 4 3 43 2879.4 4 4 59 2266.4 8 5 75 2358.7 2 6 91 1061.8 8 7 107 1457.1 6 8 123 5370.0 8 150 2395 1578.0 5 151 2411 2250.0 1
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b) Explain how the auditors might use the systematic sample identified in Part (a) to estimate the value of all saving account balances within this bank. With systematic sampling, every k’th item is selected to produce a sample from the population. It ensures an even spread of items being selected in the audit sample over the period under review across the frame. Therefore, the sample is not biased and can used to represent the frame without evaluating the whole frame. Auditors might use the systematic sample to estimate the value of the balances to ensure that the bank is reporting the value of assets correctly and according to work standards. c) What sample size would be required for the auditors to be approximately 95% confident that their estimate of the mean savings account balance at this bank is within $200 of the true mean?
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d) Choose a simple random sample of the size found in Part (c).
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