to elvaluate if auditors might be helped in determining the

to elvaluate if auditors might be helped in determining the chance of fraud if they carefully measure cash flow, sample of midlevel auditors from CPA firm were asked to indicate the cahnce of material fraud on a scale from 0 to 100 foe a case. a random sample of 46 auditors used the cash flow information. their mean assesment was 37.58, and sample standard deviation was 24.77. for a inindependent random sample of 46 auditors not using the cash flow information the sample mean and standard deviation were respectively 54.02 and 29.63. assuming hat the two population distribution are normal with equal variances test against a two sided alternitive the null hypothesis that the population means are equal. (use alpha =0.05).

let meanx be the mean assessment for auditors who measured cash flow and meany be the mean Assesmet for auditors not using the cash flow information. determine the null alternative hypotheses.

the test statistic is

the critical value(s) is (are)

what is the conclusion?

Solution

H0: x=y

Ha: x>y

Right tailed test

test statistic =

As p > alpha, accept null hypothesis

The cash flow knowing does not cause difference in the mean detection of fraud among auditors