Nestor and Maureen Are Partners in a Small Consulting Firm

question 12

Multiple Choice

Nestor and Maureen are partners in a small consulting firm located in the Republic of Bufflufia; the firm has six employees. For the last five years, the firm has focused on tax planning and tax return preparation. But, Nestor and Maureen are now interested in expanding the firm's scope of services. They are considering risk management consulting, fraud examination and business valuation as potential areas to expand the firm. They are sure at least three of their six employees would put effort into at least one of those three areas, but expanding the firm's services would require additional training for everyone.Business valuation is the process of estimating the economic value of an owner's interest in a business, often for the purpose of buying / selling that ownership interest. Based on the short case above, which of the following statements is most true?

• A)Expanding the business into business valuation may require creating or updating the firm's risk management plan.
• B)Expectancy theory can be useful both in deciding whether to expand the business and in working with future business valuation clients.
• C)Both A and B are true.
• D)Neither A nor B is true.

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Definitions:

Incremental Change

Gradual alterations or modifications made over time to processes, policies, or products.

Observational

Relating to the acquisition of knowledge that is obtained by observing and studying subjects without influencing them.

Social Action Group

A collective aimed at promoting social change or addressing social issues through direct action and community involvement.

Empowered

describes a state of having the confidence, resources, and authority to take control of one’s life or situation.