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# V05-17

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Intern
Joined: 13 Jul 2016
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22 Oct 2016, 05:22
Completely baffled by this. I think that option E if correct should be exactly opposite of what it is stating. Shouldn't breaking all the 4 big four companies lead to more variety in accounting services, as beautifully explained by ThangLe ? But the option E states that Each of the Big Four firms should not be broken into an audit and a non-audit section. Can someone please clarify this?
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22 Oct 2016, 11:09
siddharthharsh wrote:
Completely baffled by this. I think that option E if correct should be exactly opposite of what it is stating. Shouldn't breaking all the 4 big four companies lead to more variety in accounting services, as beautifully explained by ThangLe ? But the option E states that Each of the Big Four firms should not be broken into an audit and a non-audit section. Can someone please clarify this?

Whether the firms would be broken up is not the point - the CEO has already proposed that the firms must be broken up. The question asks to evaluate whether this plan to break up would be successful. The point E discusses about HOW the firms will be broken up - if the breaking happens in the way described in option E, then the plan would NOT be successful. Therefore the breaking up should NOT happen in the way described in E.
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19 Dec 2016, 20:21
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. Hi I am not able to understand the question and explanation. It will be great if someone can explain.
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20 Dec 2016, 13:34
ushasi wrote:
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. Hi I am not able to understand the question and explanation. It will be great if someone can explain.

This question has already been discussed in detail here (v05-184888.html#p1691300) and in the subsequent posts.

In case this explanation is not clear, please let us know which part you do not understand.
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Joined: 31 Jul 2015
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12 Feb 2017, 14:34
The question is

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?

(E) Correct. If each Big Four firm breaks into two – one performing audit services, and one performing non-audit services – then the field will still have 4 options for audit and 4 for non-audit. Hence there would not be effectively any expansion in the number of choices.

Here the CEO's plan is breaking up the "Big Four" firms into smaller operations so that non-audit services corporations will have significantly more options than they have now .
The option E effectively tells us that it will not increase the number of options .
So, can anyone tell me, how this options helps in assuring the success of the CEO's plan ?
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13 Feb 2017, 08:02
urhowig wrote:
The question is

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?

(E) Correct. If each Big Four firm breaks into two – one performing audit services, and one performing non-audit services – then the field will still have 4 options for audit and 4 for non-audit. Hence there would not be effectively any expansion in the number of choices.

Here the CEO's plan is breaking up the "Big Four" firms into smaller operations so that non-audit services corporations will have significantly more options than they have now .
The option E effectively tells us that it will not increase the number of options .
So, can anyone tell me, how this options helps in assuring the success of the CEO's plan ?

https://gmatclub.com/forum/v05-184888.html#p1691300

If you have still doubts after reading this explanation, please post again.
Senior Manager
Joined: 18 Jun 2016
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GMAT 1: 720 Q50 V38
GMAT 2: 750 Q49 V42
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28 May 2017, 05:26
ushasi wrote:
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. Hi I am not able to understand the question and explanation. It will be great if someone can explain.

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?

We don't have to point out the Perfect Plan; just the Best One In the List. Hence, E is correct. Even though we'd have fewer options this way, it is still better than every other plan.
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04 Jul 2017, 06:03
I think this is a poor-quality question and I don't agree with the explanation. Please recheck the wording of the Option "E" , in the GMAT Club test.
"Each of the Big Four firms should not be broken into an audit and a non-audit section"

v/s

"The Big Four firms should divide so that the audit and non-audit sections are not broken up."
Intern
Joined: 24 May 2017
Posts: 13
GMAT 1: 650 Q48 V31

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26 Sep 2017, 03:30
I think this is a poor-quality question and I agree with explanation. The right option i.e. option E is worded wrongly. It should be -
Each of the Big Four firms should be broken into an audit and a non-audit section.

The additional 'not' in the original option set is wrong and confusing.
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03 Oct 2017, 22:27
Sayantanc2k ,

Can you please let me know the strengthen concept that is hidden in this question.
Manager
Joined: 23 Jan 2017
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23 Oct 2017, 13:32
Sayantanc2k,

I am still confused here.

Option E, the way it appears on my screen says: "Each of the Big Four firms should not be broken into an audit and a non-audit section".

The corresponding OE says "If each Big Four firm breaks into two – one performing audit services, and one performing non-audit services – then the field will still have 4 options for audit and 4 for non-audit. Hence there would not be effectively any expansion in the number of choices".

I saw one of your comments that said that you have revised the OA and OE. I am not sure if the above is reflecting your revision, because it is still not making sense to me. What wrong will happen if each of the 4 big firms are broken into 2? We will have 8 firms and hence 4 choices for audit and 4 for non-audit, which solves the requirement.

Intern
Joined: 24 May 2017
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GMAT 1: 650 Q48 V31

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10 Dec 2017, 00:40
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate.
Intern
Joined: 24 Sep 2017
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21 Dec 2017, 02:08
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate.
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18 Feb 2018, 03:58
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate.
Intern
Joined: 11 Oct 2014
Posts: 15

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21 Feb 2018, 20:05
sayantanc2k wrote:
navinc wrote:
I think this is a poor-quality question and I don't agree with the explanation. There is an error - it says "sections are NOT broken up".

kirbygilliam wrote:
I think this is a poor-quality question and I don't agree with the explanation. The answer here states "The Big Four firms should divide so that the audit and non-audit sections are not broken up". When really this is the opposite of the right answer according to the solution. I think the "not" is incorrect and should be removed from the answer.

Made changes in option 5 - in OA and in OE. Please let me know whether the question makes sense now.

why do I still see the option in my test as "Each of the Big Four firms should not be broken into an audit and a non-audit section.". I'm not sure of what changes were made. I still don't understand the solution to this question.
Intern
Joined: 24 May 2017
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GMAT 1: 650 Q48 V31

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18 Jun 2018, 02:28
I think this is a poor-quality question and I don't agree with the explanation.
Intern
Joined: 29 Aug 2017
Posts: 22

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03 Sep 2018, 19:26
Bunuel wrote:
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 for non-audit services corporations will have significantly more options than they have now.
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?

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. Each of the Big Four firms should not be broken into an audit and a non-audit section.

If there are 4 firms: P1, P2, P3 and P4. Now lets say that P1 does non audit services only so P1 can be broken into smaller operations of audit say into 2 smaller firms. Similarly P2 and P3 are broken into 2 smaller firms, (non audit only), then there will be 2*3=6 options for the MNCs. If P4 does audit service then we can break it into 4. and there will be more options for the MNCs. Just a reasoning. Let me know if this makes sense.
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Joined: 03 Aug 2009
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09 Sep 2018, 23:05
I think this is a poor-quality question and I don't agree with the explanation.
Intern
Joined: 31 Mar 2018
Posts: 2
GMAT 1: 680 Q44 V40

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13 Sep 2018, 11:25
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. While I see the general logic of variety associated with option E (that breaking the Big 4 into Audit and Non-Audit sections will essentially keep the Non-Audit options at 4), the CEO seems to be recommending the break-up of the Big 4. So in that sense, how is an option suggesting a mandate to prevent the Big 4 break-up supporting the CEO's recommendation?
Intern
Joined: 19 Jun 2018
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23 Sep 2018, 16:48
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. confusing explanation
Re V05-17   [#permalink] 23 Sep 2018, 16:48

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# V05-17

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