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16 Sep 2014, 02:25
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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.
Which of the following is most like the CEOs’ plan in logical structure?
A. The owners of a prosperous, family-run bakery with several food preparation facilities decide to sell various buildings to local restaurants and coffee shops so that they can retire.
B. A federal court rules that a communications conglomerate is in violation of anti-trust laws and must break into smaller companies to enable competition from local businesses.
C. A school district superintendent writes a letter to the publisher on his district’s textbooks complaining about lack of variety and suggesting that the publisher add new divisions with different emphases to their corporate structure.
D. A subsidiary of a large textile manufacturer is bought out in a hostile takeover, and its operations are changed.
E. The board of a hospital decides to retain only a small number of staff physicians and to rent out remaining space to specialists in private practice.
Which of the following is most like the CEOs’ plan in logical structure?
A. The owners of a prosperous, family-run bakery with several food preparation facilities decide to sell various buildings to local restaurants and coffee shops so that they can retire.
B. A federal court rules that a communications conglomerate is in violation of anti-trust laws and must break into smaller companies to enable competition from local businesses.
C. A school district superintendent writes a letter to the publisher on his district’s textbooks complaining about lack of variety and suggesting that the publisher add new divisions with different emphases to their corporate structure.
D. A subsidiary of a large textile manufacturer is bought out in a hostile takeover, and its operations are changed.
E. The board of a hospital decides to retain only a small number of staff physicians and to rent out remaining space to specialists in private practice.
16 Sep 2014, 02:25
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Official Solution:
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.
Which of the following is most like the CEOs’ plan in logical structure?
A. The owners of a prosperous, family-run bakery with several food preparation facilities decide to sell various buildings to local restaurants and coffee shops so that they can retire.
B. A federal court rules that a communications conglomerate is in violation of anti-trust laws and must break into smaller companies to enable competition from local businesses.
C. A school district superintendent writes a letter to the publisher on his district’s textbooks complaining about lack of variety and suggesting that the publisher add new divisions with different emphases to their corporate structure.
D. A subsidiary of a large textile manufacturer is bought out in a hostile takeover, and its operations are changed.
E. The board of a hospital decides to retain only a small number of staff physicians and to rent out remaining space to specialists in private practice.
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 option is most similar to the plan in logical structure? In order to answer this question, first paraphrase the logical structure of the plan in the passage. First, it is important to note that the plan is being proposed, not by leaders of the Big Four firms or by legislators, but by a group of corporate CEOs who have no real power to compel compliance with their suggestions. Second, it should be observed that driving this suggestion is the need for more options, or variety; since corporations are federally required to use separate firms for audit and non-audit services, lack of variety creates the difficulty. Lastly, note that the proposed solution has to do with restructuring an already functioning operation in order to provide this additional variety.
A. This plan is proposed by the owners of a company, who have the power to make whatever changes they may desire.
B. Here a federal court, which has the power to enforce its decisions, is the entity proposing the plan to break up a larger corporation.
C. CORRECT. This option correctly identifies several similarities with the original passage: the school superintendent does not have power to enforce his suggestion of corporate restructuring, but his complaint does stem from a lack of options in textbook choices.
D. A hostile takeover has already changed operations; this option is not concerned at all with lack of variety.
E. This option does concern the restructuring of a business, but the restructuring is done by those in charge of the business. Also, lack of options is not mentioned.
Answer: C
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.
Which of the following is most like the CEOs’ plan in logical structure?
A. The owners of a prosperous, family-run bakery with several food preparation facilities decide to sell various buildings to local restaurants and coffee shops so that they can retire.
B. A federal court rules that a communications conglomerate is in violation of anti-trust laws and must break into smaller companies to enable competition from local businesses.
C. A school district superintendent writes a letter to the publisher on his district’s textbooks complaining about lack of variety and suggesting that the publisher add new divisions with different emphases to their corporate structure.
D. A subsidiary of a large textile manufacturer is bought out in a hostile takeover, and its operations are changed.
E. The board of a hospital decides to retain only a small number of staff physicians and to rent out remaining space to specialists in private practice.
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 option is most similar to the plan in logical structure? In order to answer this question, first paraphrase the logical structure of the plan in the passage. First, it is important to note that the plan is being proposed, not by leaders of the Big Four firms or by legislators, but by a group of corporate CEOs who have no real power to compel compliance with their suggestions. Second, it should be observed that driving this suggestion is the need for more options, or variety; since corporations are federally required to use separate firms for audit and non-audit services, lack of variety creates the difficulty. Lastly, note that the proposed solution has to do with restructuring an already functioning operation in order to provide this additional variety.
A. This plan is proposed by the owners of a company, who have the power to make whatever changes they may desire.
B. Here a federal court, which has the power to enforce its decisions, is the entity proposing the plan to break up a larger corporation.
C. CORRECT. This option correctly identifies several similarities with the original passage: the school superintendent does not have power to enforce his suggestion of corporate restructuring, but his complaint does stem from a lack of options in textbook choices.
D. A hostile takeover has already changed operations; this option is not concerned at all with lack of variety.
E. This option does concern the restructuring of a business, but the restructuring is done by those in charge of the business. Also, lack of options is not mentioned.
Answer: C
