A particular accounting error frequently occurs in large corporations

Question

A particular accounting error frequently occurs in large corporations when financial reports are prepared using a certain spreadsheet template. Although small businesses often use the same type of spreadsheet template, this accounting error is only rarely detected in small businesses. This fact, however, does not indicate that most small businesses are less susceptible to the error, since __________.

A. large corporations and small businesses are not the only organizations that use the type of spreadsheet template associated with the error

B. the accounting error has been identified in organizations that did not use the spreadsheet template typically associated with the error

C. familiarity with spreadsheet software can reduce the likelihood of certain accounting errors

D. both large corporations and small businesses typically require more than a year of financial reporting before the error becomes evident, and small businesses, unlike large corporations, often change their accounting systems within the first year

E. the spreadsheet template associated with the error generally constitutes a larger proportion of the reporting tools used by small businesses than by large corporations

MartyMurray · Answer

A particular accounting error frequently occurs in large corporations when financial reports are prepared using a certain spreadsheet template. Although small businesses often use the same type of spreadsheet template, this accounting error is only rarely detected in small businesses. This fact, however, does not indicate that most small businesses are less susceptible to the error, since __________.

In answering a Complete the Passage question, it's key to note the keyword before the blank.

In this case, "since" indicates that what fills the blank will support what appears before the blank.

So, we need a choice that indicates that the evidence does not indicate that small businesses are less susceptible to the error.

D. both large corporations and small businesses typically require more than a year of financial reporting before the error becomes evident, and small businesses, unlike large corporations, often change their accounting systems within the first year

D does what we need by providing another reason why the error is only rarely detected in small businesses, because they stop using the template before the error shows up.

guddo · Answer

A particular accounting error frequently occurs in large corporations when financial reports are prepared using a certain spreadsheet template. Although small businesses often use the same type of spreadsheet template, this accounting error is only rarely detected in small businesses. This fact, however, does not indicate that most small businesses are less susceptible to the error, since __________.

The argument says the error is rarely detected in small businesses, but that does not necessarily mean small businesses are less likely to have the error.  The missing idea  is that the error may be harder to detect in small businesses, even if they are just as  susceptible .

A. large corporations and small businesses are not the only organizations that use the type of spreadsheet template associated with the error

This is irrelevant. Other organizations’ use of the template does not explain why the error is rarely detected in small businesses.

B. the accounting error has been identified in organizations that did not use the spreadsheet template typically associated with the error

This does not explain the lower detection rate in small businesses that do use the template.

C. familiarity with spreadsheet software can reduce the likelihood of certain accounting errors

This does not help unless we know small businesses are more familiar with the software. The option gives no such comparison.

D. both large corporations and small businesses typically require more than a year of financial reporting before the error becomes evident, and small businesses, unlike large corporations, often change their accounting systems within the first year

This is correct. If the error usually takes more than a year to become visible, but small businesses often change systems before that, then the error may simply go undetected in small businesses. So rare detection does not prove lower susceptibility.

E. the spreadsheet template associated with the error generally constitutes a larger proportion of the reporting tools used by small businesses than by large corporations

This would make small businesses seem more exposed to the template, but it does not clearly explain why the error is rarely detected.

Answer: (D)

WildSnow · Answer

What am I missing with (D)? I'm a little lost on this one.

Are they basically equating an accounting system with a spreadsheet template? I don't see how that follows. Can someone break down (D) for me?

egmat · Answer

Hi WildSnow,

Good instinct to be suspicious, because you're right that (D) is  not  saying "an accounting system = the spreadsheet template." That equivalence isn't what makes (D) work, so let's drop it and look at what (D) is actually doing.

The thing to track here isn't  what equals what  - it's  timing . The argument's worry is this: the error is  rarely detected  in small businesses, and someone might jump to "so small businesses must be less susceptible." Your job in the blank (it comes after "since") is to give a reason that the error could be just as present but simply  never gets seen .

That's the gap (D) fills, in two linked facts:

- The error takes  more than a year  of reporting before it becomes evident - in  any  organization, big or small.
- Small businesses, unlike large corporations,  often change their accounting systems within the first year .

Put those together: a small business frequently moves off its setup  before  the year is up - i.e., before the error would ever surface. So the error can be sitting there, just as likely as in a large corporation, and nobody catches it because they've already moved on. Rare  detection , not low  susceptibility . That's exactly the conclusion the author wanted supported.

Notice (D) never needs "accounting system" and "spreadsheet template" to be the same thing. It only needs the small business to  stop the reporting situation early , before the error's reveal window. The template question is a red herring you brought to it.

Quick way to lock it in - turn one knob in (D):

- If small businesses changed systems  after two years  instead of within the first year, would (D) still support the conclusion? (No - they'd be around long enough to detect it.)

The support lives entirely in the  timing mismatch , not in any equivalence between the two terms.

Answer: D

guddo · Answer

D is not equating “accounting system” with “spreadsheet template.”

The point is simpler: the error needs more than one year of continuous reporting before it becomes visible. If small businesses often change their accounting systems within the first year, then they may stop using that setup before the error has enough time to appear.

So  the error may still be present or likely to occur , but it is rarely detected because the small business changes systems too soon. That is why rare detection does not prove lower  susceptibility .

A particular accounting error frequently occurs in large corporations

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A particular accounting error frequently occurs in large corporations

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