Nestor and Maureen Are Partners in a Small Consulting Firm

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 A and B are true.
D) Neither A nor B is true.