5. 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 three errors, 4 claims have two errors, 22 claims have one error, and the remaining 57 claims have no errors. a. Treating the claims as psu's and the observations for each field as ssu's, estimate the error rate for all 828 claims. Give a standard error for your estimate. b. Estimate the total number of errors in the 828 claims. Give a standard error for this estimate. c. Suppose that, instead of taking a cluster sample, the firm takes an SRS of 85 x 215=18,275 fields from the 178,020 fields in the population. If the estimated error rate from the SRS is the same as in part (a), what will be the estimated variance under SRS? How does this compare with the estimated variance from part (a)?

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5. 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 three errors, 4 claims have two
errors, 22 claims have one error, and the remaining 57 claims have no errors.
a. Treating the claims as psu's and the observations for each field as ssu's,
estimate the error rate for all 828 claims. Give a standard error for your
estimate.
b. Estimate the total number of errors in the 828 claims. Give a standard error for
this estimate.
c. Suppose that, instead of taking a cluster sample, the firm takes an SRS of 85 x
215=18,275 fields from the 178,020 fields in the population. If the estimated
error rate from the SRS is the same as in part (a), what will be the estimated
variance under SRS? How does this compare with the estimated variance from
part (a)?
Transcribed Image Text:5. 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 three errors, 4 claims have two errors, 22 claims have one error, and the remaining 57 claims have no errors. a. Treating the claims as psu's and the observations for each field as ssu's, estimate the error rate for all 828 claims. Give a standard error for your estimate. b. Estimate the total number of errors in the 828 claims. Give a standard error for this estimate. c. Suppose that, instead of taking a cluster sample, the firm takes an SRS of 85 x 215=18,275 fields from the 178,020 fields in the population. If the estimated error rate from the SRS is the same as in part (a), what will be the estimated variance under SRS? How does this compare with the estimated variance from part (a)?
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