MGAB03H3 Chapter 1: 1prob
14 Aug 2015
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Integrating across the curriculum: auditing quality of information, relevant information to auditors aden, inc. is a manufacturer of television sets. The company recently revised its production processes and invested in new equipment to reduce labor costs. Following are possible measures that aden could use to monitor product defects. Discuss the quality of information provided by each measure. (hint: see exhibit 1. 9) Ratio of defective televisions returned to the number of televisions sold (data from customer service department records and sales department records). Monthly defective unit warranty costs incurred (data from the general ledger). Monthly number of defects discovered during routine tests of televisions at the end of the manufacturing process (data from production records). Customer survey responses to the question, how satisfied are you with the quality of your television set? on a scale from 1 (very satisfied) to 5 (very unsatisfied). Surveys are mailed to 1 percent of randomly selected repeat customers from sales records.
