Answer: As an example of a situation in which several

Chapter 6, Problem 6.5

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As an example of a situation in which several different statisticscould reasonably be used to calculate a point estimate,consider a population of N invoices. Associated witheach invoice is its book value, the recorded amount ofthat invoice. Let T denote the total book value, a knownamount. Some of these book values are erroneous. Anaudit will be carried out by randomly selecting n invoicesand determining the audited (correct) value for each one.Suppose that the sample gives the following results (indollars). LetYsample mean book valueXsample mean audited valueDsample mean errorPropose three different statistics for estimating the totalaudited (i.e., correct) valueone involving just N and X,another involving T, N, and D, and the last involving T andX/Y . If N 5000 and T 1,761,300, calculate the threecorresponding point estimates. (The article StatisticalModels and Analysis in Auditing, Statistical Science, 1989:233). discusses properties of these estimators.)