The auditor for a large corporation routinely monitors cashdisbursements. As part of this process, the auditor examines checkrequest forms to determine whether they have been properlyapproved. Improper approval can occur in several ways. Forinstance, the check may have no approval, the check request mightbe missing, the approval might be written by an unauthorizedperson, or the dollar limit of the authorizing person might beexceeded.
(a) Last year the corporation experienced a 5percent improper check request approval rate. Since this wasconsidered unacceptable, efforts were made to reduce the rate ofimproper approvals. Letting p be the proportion of allchecks that are now improperly approved, set up the null andalternative hypotheses needed to attempt to demonstrate that thecurrent rate of improper approvals is lower than last year's rateof 5 percent. (Round your answers to 2 decimalplaces.)
H0: p > ______ versusHa: p < ______.
(b) Suppose that the auditor selects a randomsample of 617 checks that have been approved in the last month. Theauditor finds that 19 of these 617 checks have been improperlyapproved. Calculate the test statistic. (Round your answersto 2 decimal places. Negative value should be indicated by a minussign.)
(c) Find the p-value for the test ofpart b. Use the p-value to carry out the test bysetting a equal to .10, .05, .01, and .001. Interpret your results.(Round your answer to 4decimal places.)
p-value
Reject H0 at ? = (Click toselect).1, and .05/ .1, .05 and .01/ .10, .05, .01, and .001/none.
