Statement of a problem № m40596


An accounting firm is interested in estimating the error rate in a compliance audit it is conducting. The population contains 828 claims, and the firm audits an SRS of 85 of those claims. In each of the 85 sampled claims, 215 fields are checked for errors. One claim has errors in 4 of the 215 fields, 1 claim has 3 errors, 4 claims have 2 errors, 22 claims have 1 error, and the remaining 57 claims have no errors. a. Treating the claims as psus and the observations for each field as ssus, estimate the error rate, defined to be the average number of errors per field, along with the standard error for your estimate. b. Estimate (with standard error) the total number of errors in the 828 claims. c. Suppose that instead of taking a cluster sample, the firm had taken an SRS of 85× 215 = 18,275 fields from the 178,020 fields in the population. If the estimated error rate from the SRS had been the same as in (a), what would the estimated variance ˆV (ˆpSRS) be? How does this compare with the estimated variance from (a)?

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