Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Nov 2007:30 AM PST
-08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Nov 2001:30 PM EST
-02:30 PM IST
Learn how Kamakshi achieved a GMAT 675 with an impressive 96th %ile in Data Insights. Discover the unique methods and exam strategies that helped her excel in DI along with other sections for a balanced and high score.
Nov 1912:30 PM EST
-01:30 PM EST
Learn how Keshav, a Chartered Accountant, scored an impressive 705 on GMAT in just 30 days with GMATWhiz's expert guidance. In this video, he shares preparation tips and strategies that worked for him, including the mock, time management, and more
Nov 2211:00 AM IST
-01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment- Nov 23
11:00 AM IST
-01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease. 
Nov 2407:00 PM PST
-08:00 PM PST
Full-length FE mock with insightful analytics, weakness diagnosis, and video explanations!
Nov 2510:00 AM EST
-11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.
22 Jun 2014, 14:17
Kudos
Bookmarks
V05-17
My commentary re: the type below END SOLUTION tag...
===Original Question===
Which of the following stipulations would be most helpful in assuring the success of the CEOs’ plan to provide more variety in accounting services by breaking up the Big Four firms?
Federal regulations require that corporations use separate accounting firms for audit and non-audit services. This presents difficulties for many multi-national companies because there are only four large international accounting firms based in the United States. An outspoken group of CEOs has suggested breaking up the "Big Four" firms into smaller operations, so that corporations will have more options for their accounting needs.
a) The firms should maintain their multi-national contacts.
b) CEOs for the new companies should be chosen from inside each firm.
c) Corporations must keep the same firm for their audit services, but should choose a new firm for non-audit needs.
d) The new firms should maintain their internal audit procedures.
e) The Big Four firms should divide so that the audit and non-audit sections are not broken up.
==Provided Solution==
Situation: A group of CEOs has proposed that the Big Four accounting firms be broken into smaller firms so that corporations will have more options for audit and non-audit services.
Reasoning: Which added provision will help assure the success of the CEOs’ plan? The CEOs suggest breaking up the Big Four firms so that corporations can have more choices for their audit and non-audit services, which must, by federal regulation, not be performed by the same firm. Anything that further insures that audit and non-audit services will be kept separate in breaking up the firms will also assure that CEOs will get the added variety they are seeking.
A) This option does not directly impact the question of variety.
B) The origin of new CEOs does not deal with variety or with the separating of audit and non-audit services.
C) This provision specifies what decisions corporations may be allowed to make, but it does not insure variety.
D) This option does not directly impact the question of variety.
E) If each Big Four firm breaks into two – one performing audit services, and one performing non-audit services – then the field will have gained the variety sought by CEOs.
The correct answer is E
==END SOLUTION==
I agree with the logic of selecting E). However, when the question is asked, it appears there's a type that takes "E" out as a rational response.
My commentary re: the type below END SOLUTION tag...
===Original Question===
Which of the following stipulations would be most helpful in assuring the success of the CEOs’ plan to provide more variety in accounting services by breaking up the Big Four firms?
Federal regulations require that corporations use separate accounting firms for audit and non-audit services. This presents difficulties for many multi-national companies because there are only four large international accounting firms based in the United States. An outspoken group of CEOs has suggested breaking up the "Big Four" firms into smaller operations, so that corporations will have more options for their accounting needs.
a) The firms should maintain their multi-national contacts.
b) CEOs for the new companies should be chosen from inside each firm.
c) Corporations must keep the same firm for their audit services, but should choose a new firm for non-audit needs.
d) The new firms should maintain their internal audit procedures.
e) The Big Four firms should divide so that the audit and non-audit sections are not broken up.
==Provided Solution==
Situation: A group of CEOs has proposed that the Big Four accounting firms be broken into smaller firms so that corporations will have more options for audit and non-audit services.
Reasoning: Which added provision will help assure the success of the CEOs’ plan? The CEOs suggest breaking up the Big Four firms so that corporations can have more choices for their audit and non-audit services, which must, by federal regulation, not be performed by the same firm. Anything that further insures that audit and non-audit services will be kept separate in breaking up the firms will also assure that CEOs will get the added variety they are seeking.
A) This option does not directly impact the question of variety.
B) The origin of new CEOs does not deal with variety or with the separating of audit and non-audit services.
C) This provision specifies what decisions corporations may be allowed to make, but it does not insure variety.
D) This option does not directly impact the question of variety.
E) If each Big Four firm breaks into two – one performing audit services, and one performing non-audit services – then the field will have gained the variety sought by CEOs.
The correct answer is E
==END SOLUTION==
I agree with the logic of selecting E). However, when the question is asked, it appears there's a type that takes "E" out as a rational response.
Quote:
To use the same logic as in the solution: Although the Big Four firms are dividing, the fact that the audit- and non-audit sections ARE NOT broken up in (E) does nothing for variety.
Archived Topic
Hi there,
Archived GMAT Club Tests question - no more replies possible.
Where to now? Try our up-to-date Free Adaptive GMAT Club Tests
for the latest questions.
Still interested? Check out the "Best Topics" block below for better discussion and related questions.
Thank you for understanding, and happy exploring!
10 Jul 2014, 01:25
Kudos
Bookmarks
e) The Big Four firms should divide so that the audit and non-audit sections are not broken up.
I don't get it.
I think if e is the answer, it should change to:
e) The Big Four firms should divide so that the audit and non-audit sections are broken up.
Help!
I don't get it.
I think if e is the answer, it should change to:
e) The Big Four firms should divide so that the audit and non-audit sections are broken up.
Help!
Archived Topic
Hi there,
Archived GMAT Club Tests question - no more replies possible.
Where to now? Try our up-to-date Free Adaptive GMAT Club Tests
for the latest questions.
Still interested? Check out the "Best Topics" block above for better discussion and related questions.
Thank you for understanding, and happy exploring!
Moderator:
