If a company being audited fails this test what is the

Reference no: EM13605588

An accounting firm has noticed that of the companies it audits, 85% show no inventory shortages, 10% show small inventory shortages and 5% show large inventory shortages. The firm has devised a new accounting test for which it believes the following probabilities hold:

P(company will pass test | no shortage) = .90

P(company will pass test | small shortage) = .50

P(company will pass test | large shortage) = .20

a. If a company being audited fails this test, what is the probability of a large or small inventory shortage?

b. If a company being audited passes this test, what is the probability of no inventory shortage?

Reference no: EM13605588

Questions Cloud

Listed below are measured amounts of lead in micrograms per : listed below are measured amounts of lead in micrograms per cubic meter or ugm3 in the air. the epa has established an

Kay dart enterprises uses a machine that removes the bark : kay dart enterprises uses a machine that removes the bark from cut timber. the machine is unreliable and results in a

The human eye can readily detect wavelengths from about : the human eye can readily detect wavelengths from about 400 to 700 . if white light illuminates a diffraction grating

Garcia manufacturing uses a job order cost system and : garcia manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor

If a company being audited fails this test what is the : an accounting firm has noticed that of the companies it audits 85 show no inventory shortages 10 show small inventory

Trs is a large securities dealer last year the company made : trs is a large securities dealer. last year the company made 120000 trades with an average commission of 120. because

A 50 -thick layer of oil n146 is sandwiched between a 15 : a 5.0 -thick layer of oil n1.46 is sandwiched between a 1.5 -thick sheet of glass and a 2.3 -thick sheet of polystyrene

Henderson farms reports the following results for the month : henderson farms reports the following results for the month of november sales 10000 units 600000 variable costs 420000

A gas cylinder holds 0330mol of o2 at 150c and a pressure : a gas cylinder holds 0.330mol of o2 at 150c and a pressure of 3.30atm. the gas expands adiabatically until the volume

User Account

All Pages