Nestor and Maureen Are Partners in a Small Consulting Firm

question 69

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.Part of fraud examination is analyzing an accounting information system and other sources to determine if fraud has occurred.If Nestor and Maureen expand their practice into fraud examination, which of the following statements is most true?

• A)The COSO enterprise risk management framework may be useful to their new clients.
• B)Expectancy theory may be a useful tool in conducting a fraud examination.
• C)Both the COSO enterprise risk management framework may be useful to their new clients and expectancy theory may be a useful tool in conducting a fraud examination are true.
• D)Neither the COSO enterprise risk management framework may be useful to their new clients nor expectancy theory may be a useful tool in conducting a fraud examination is true.

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Definitions:

Asset Management

The practice of effectively managing a company's tangible and intangible assets to maximize their value.

Debt Management

The process of overseeing and controlling an entity's debt load through financial planning, budgeting, and various strategies to ensure financial stability.

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of periods to identify trends and growth patterns.

Gross Profit Ratio

A financial metric indicating the proportion of money left from revenues after accounting for the cost of goods sold, presented as a percentage.