What is the probability that a company has no serious errors

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Reference no: EM133466055

Assignment:

Internal auditors are often used to review an organization's financial statements such as balance sheets, income statements, and cash flow statements prior to public filings. Auditors seek to verify that the financial statements accurately represent the financial position of the organization and that the statements follow accepted accounting principles. Many errors that are discovered by auditors are minor errors that are easily corrected. However, some errors are serious and require substantial time to rectify. Suppose that the financial statements of 567 public companies are audited. The file internalaudit2 contains the number of errors discovered during the internal audit of each of these 567 public companies that were classified as "serious." Use the data in the file internalaudit2 to answer the following.

(a) Construct an empirical discrete probability distribution for the number of serious errors discovered during the internal audits of these 567 public companies.

Number of Serious Errors	Probability f(x)
0	44
1	52
2	234
3	90
4	98
5	42
6	7

0= 44

1=52

2= 234

3= 90

4= 98

5=42

6=7

(b) What is the probability that a company has no serious errors in its financial statements?

(d) What is the expected number of serious errors in a company's financial statements?

(e) What is the variance of the number of serious errors in a company's financial statements?

(f) What is the standard deviation of the number of serious errors in a company's financial statements?

Reference no: EM133466055

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