Reference no: EM131966863

Statistics has become a valuable tool for auditors, especially where large inventories are involved. It would be costly and time consuming for an auditor to inventory each item in a large operation. Thus, the auditor frequently resorts to obtaining a random sample of items and using the sample results to check the validity of a company's ?nancial statement. For example, a hospital ?nancial statement claims an inventory that averages $300 per item. An auditors random sample of 20 items yielded a mean and standard deviation of $160 and $90, respectively. Do the data contradict the hospitals claimed mean value per inventoried item and indicate that the average is less than $300? Use LaTeX: alpha = 0.05α=0.05 and the P-value approach.