A study showed that 14 of 180 publicly traded business services companies failed a test for compliance with Sarbanes-Oxley requirements for financial records and fraud protection. Assuming that these are a random sample of all publicly traded companies, construct a 95% confidence interval for the overall noncompliance proportion. (Round your answers to 4 decimal places.)

In a sample with a number n of people surveyed with a probability of a success of [tex]\pi[/tex], and a confidence level of [tex]1-\alpha[/tex], we have the following confidence interval of proportions.

[tex]\pi \pm z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

In which

z is the zscore that has a pvalue of [tex]1 - \frac{\alpha}{2}[/tex].

For this problem, we have that:

[tex]n = 180, \pi = \frac{14}{180} = 0.0778[/tex]

95% confidence level

So [tex]\alpha = 0.05[/tex], z is the value of Z that has a pvalue of [tex]1 - \frac{0.05}{2} = 0.975[/tex], so [tex]Z = 1.96[/tex].

The lower limit of this interval is:

[tex]\pi - z\sqrt{\frac{\pi(1-\pi)}{n}} = 0.0778 - 1.96\sqrt{\frac{0.0778*0.9222}{180}} = 0.0387[/tex]

The upper limit of this interval is:

[tex]\pi + z\sqrt{\frac{\pi(1-\pi)}{n}} = 0.0778 + 1.96\sqrt{\frac{0.0778*0.9222}{180}} = 0.1169[/tex]

The 95% confidence interval for the overall noncompliance proportion is (0.0387, 0.1169).