An internal auditor for a large automotive parts retailer wishes to perform a risk analysis and wants to use an appropriate statistical tool to help identify stores that would be out of line compared to the majority of stores. The most appropriate statistical tool to use is:
- Line artime series analysis.
- Cross-sectional regression analysis.
- Cross tabulations with chi-square analysis of significance.
- Time series multiple regression analysis to identify changes in individual stores over time.
Answer(s): B
Explanation:
Time series data pertain to a given entity over a number of prior time periods. Cross-sectional data, however, pertain to different entities for a given time period or at a given time. Thus, cross- sectional regression analysis is the most appropriate statistical tool because it compares attributes of all stores' operating statistics at one moment in time.