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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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
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.
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.