Confidence Limits

Confidence Limits

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Doea anybody know the formula for Confidence Limits (I am sure that is what they are called !!).

eg. if I want to do spot checks on a stock take - the formula for 95% accuracy would give me a number of the total population to check (eg. total items X * formula = y the number of items to double check)

Brian

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By carnmores
20th Oct 2006 14:46

sounds like something based on a normal distribution
the ICAEW used to have a small company audit manual where these confidence limits were explained.

most bigger firms have a section on thesse in their manuals

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By User deleted
20th Oct 2006 15:47

Thanks Nicholas
You don't have the formula do you ?

Unfortunately I do not work for a big audit firm !!

I work in industry and will be doing spot checks on a stock take at the end of the month - I just wanted a scientific approach rather than picking just a sample.

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By neileg
23rd Oct 2006 09:32

No formula as such
There is no x=ay+b type of formula. As Nicola pointed out, you would usually employ a normal distribution analysis to this type of problem.

Under a normal distribution, 95% of values lie within one standard deviation of the mean, 99% within two standard deviations. This gives you the confidence level.

As Nicola points out, you need to read up on this. Most basic auditing or statistics texts will cover this.

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By neileg
23rd Oct 2006 16:08

Mea Culpa
Sorry Nicholas.

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By carnmores
23rd Oct 2006 15:13

?
have i had a sex change or has N removed her comment for some reason

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