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Research Methods - Assignment II

This document provides a case study for a hypothesis testing assignment. An accountant wants to test if average quarterly cash shortages have increased from Birr500 with a standard deviation of Birr150. The null hypothesis is that the average has not increased, and the alternative is that the average has increased. A sample of 40 quarterly cash counts had a mean of Birr640. The appropriate test is a one-sample t-test to determine if the new mean is statistically higher than the past average, which would mean internal controls need strengthening.

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209 views2 pages

Research Methods - Assignment II

This document provides a case study for a hypothesis testing assignment. An accountant wants to test if average quarterly cash shortages have increased from Birr500 with a standard deviation of Birr150. The null hypothesis is that the average has not increased, and the alternative is that the average has increased. A sample of 40 quarterly cash counts had a mean of Birr640. The appropriate test is a one-sample t-test to determine if the new mean is statistically higher than the past average, which would mean internal controls need strengthening.

Uploaded by

gashaw mekonnen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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ACFN 3111-

Research Methods in Accounting & Finance

Chapter II
Hypothesis Formulation & Testing
Hand in Assignment – Hypothesis testing
Given:
A company’s accountant want to test the adequacy and appropriateness of internal control mechanisms for
cash. In the past it was believed that the average claim of cash shortage was Birr500 with a standard deviation
of Birr150. However, the accountant believes that this may have increased due to the high turnover of
employees. The accountant want to test if the quarterly cash shortage changed and the internal control tools
should be strengthened. A random sample of 40 quarterly cash counts is taken and gives a mean quarterly
claim of Birr640.
Required:
1. Set the null and alternative hypotheses.
2. Perform a hypothesis test of whether cash shortages have increased and the internal control tools should
be improved.
3. State the rationale for the statistical test that you choose and apply.

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