Question

The purpose of a data audit is to determine how “fit” a particular company’s data is for a given purpose. A data audit not only profiles the data, but also assesses the impact that poor quality data will have on a company’s performance and profit.

Grant Thornton LLP is the American member firm of Grant Thornton International, the seventh largest accounting network in the world by combined fee income. Grant Thornton LLP is the sixth largest U.S. accounting and advisory organization. An auditor at Grant Thornton has taken a random sample of his clients, and collected data on the number of accounts receivable that are more than sixty days past due. The data collected is summarized below.

	Client 1	Client 2	Client 3	Client 4	Client 5	Client 6	Client 7	Client 8	Client 9	Client 10	Client 11	Client 12	Client 13
Number of accounts receivable more than sixty days past due:	3	10	9	7	2	24	11	12	9	3	14	6	8

How many of this Grant Thornton auditor’s clients have accounts receivable values that are below the mean?

ANSWER:

Assume that the Grant Thornton auditor does not know anything about the shape of the data for the population. Based on extensive historical data, however, it is assumed that the population mean is 9.7 and the population standard deviation is 6.0. According to Chebyshev’s Theorem, what percent of the values should fall between 1.60 and 17.80?

ANSWER:  % (report your answer to 2 decimal places, using conventional rounding rules)

The random variable “Number of accounts receivable more than sixty days past due” is being measured using the _____________ scale.

Answer 1

average = Σx/n = 9.08

8 of this Grant Thornton auditor’s clients have accounts receivable values that are below the mean

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µ =    9.7          
σ =    6          
we need to calculate probability for ,              
P (   1.6   < X <   17.8   )
=P( (1.6-9.7)/6 < (X-µ)/σ < (17.8-9.7)/6 )              
              
P (    -1.350   < Z <    1.350   )

required probability = 1 - 1/k² = 1-1/1.35² = 0.4513 or 45.13%

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