Q Bank Question of The Day

I don’t buy that answer at all. I would have to say the best answer (if we are talking about fraud, and assesing recevable collectibility, etc.) is B. With intercompany sales you have to be able to track not just what is sold to an affiliate, but what portion of that is sold to third parties vs. sitting in inventory to see whne the profit piece of the intercompany sale can be realized. I don’t think you’ll see anythng this unusual on th exam, unless the assigned readings have a specific example that they ask you to know.

> Yeah, Jane Kilgore is the analyst, she is not an > it nor does she have market penetration. > Classic! I had to re-read the question twice because I just couldn’t believe I hadn’t picked it up first time around. No wonder Kilgore is worried that a third of her income is to her own consolidated subsidiaries - she’s paying for her own services. I picked ‘C’, but I agree with the answer given in hindsight. As pointed out above, the key is that the consolidation would eliminate any transfer pricing or similar fraud efforts.

Just goes to show you how well I (didn’t) read the question!

I thought it said most. I swear 20% of my wrong answers stem from misreading a’s because I rushed.