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Question: Auditor risk study. Accounting Review (January 1991) reported on a study of the effect of two factors, confirmation of accounts receivable and verification of sales transactions, on account misstatement risk by auditors. Both factors were held at the same two levels: completed or not completed. Thus, the experimental design is a 2 × 2 factorial design.
(a) Identify the factors, factor levels, and treatments for this experiment.
(b) Explain what factor interaction means for this experiment.
(c) A graph of the hypothetical mean misstatement risks for each of the 2 × 2 = 4 treatments is shown here. In this hypothetical case, does it appear that interaction exists?
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