B6-5/6/7 Flashcards Preview

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Flashcards in B6-5/6/7 Deck (28):
1

In a large public corporation, evaluating internal control procedures should be the responsibility of:

a.

Operations management staff who report to the chief operations officer.

b.

Security management staff who report to the chief facilities officer.

c.

Accounting management staff who report to the CFO.

d.

Internal audit staff who report to the board of directors.

Choice "d" is correct. In a large public corporation, evaluating internal control procedures should be the responsibility of an organizationally independent internal audit function that reports to the governing body of the corporation.

Choice "c" is incorrect. Evaluation of the effectiveness of the internal control procedures by accounting management that report to the CFO would likely be subject to bias and lack objectivity since the controls are likely designed and at least partially implemented by that staff. Use of the accounting management that report to the CFO would not be appropriate.

Choice "a" is incorrect. Operations management staff reporting to the chief operations officer would likely lack the depth of knowledge of financial controls that extend beyond operations necessary to evaluate the internal control procedures of a large public corporation. Use of operations management staff would not be appropriate.

Choice "b" is incorrect. Securities management staff reporting to the chief facilities officers would likely lack the expertise necessary to evaluation the internal control procedures in a large public corporation. Use of securities management staff would not be appropriate.

2

Which of the following types of bonds is most likely to maintain a constant market value?

a.

Zero-coupon.

b.

Floating-rate.

c.

Callable.

d.

Convertible.

Choice "b" is correct. Floating-rate bonds would automatically adjust the return on a financial instrument to produce a constant market value for that instrument. No premium or discount would be required since market changes would be accounted for through the interest rate.

Choice "a" is incorrect. Zero-coupon bonds have, in effect, a fixed stated rate of return that would require assignment of a premium or discount to the underlying security to produce a market rate of interest if that market yield is different from the stated rate.

Choice "c" is incorrect. Callable bonds would fluctuate in value. In fact, one of the advantages to the issuer of callable bonds is the ability to call or, effectively, refinance the bonds if interest rates become favorable.

Choice "d" is incorrect. Convertible bonds would fluctuate in value. In fact, one of the advantages to the investor (and potentially the issuer) in relation to convertible bonds is the ability to convert or, effectively, swap the bonds for equity if market conditions become favorable (equity returns exceed fixed return on debt).

3

International Standards for the Professional Practice of Internal Auditing include standards for quality of communications. According to the Standard, communications that are free from errors and distortions and are faithful to underlying facts are characterized as:

a.

Complete.

b.

Clear.

c.

Objective.

d.

Accurate.

 

Choice "d" is correct. Accurate communications are free from errors and distortions and are faithful to the underlying facts.

Choice "c" is incorrect. Communications that are free from errors are characterized as accurate. Objective communications are fair, impartial, unbiased, and are the result of a fair-minded and balanced assessment of all relevant facts and circumstances.

Choice "b" is incorrect. Communications that are free from errors are characterized as accurate. Clear communications are easily understood and logical, avoiding unnecessary technical language and providing all significant and relevant information.

Choice "a" is incorrect. Communications that are free from errors are characterized as accurate. Complete communications lack nothing that is essential to the target audience and include all significant and relevant information and observations to support recommendations and conclusions.

4

Harken Corporation’s price earnings ratio is 10 and its earnings in the current year is $5 per share but the earnings expected in the coming year is $8 per share. What is the anticipated price of Harken?

a.

$50

b.

$80

c.

$0.80

d.

$0.50

 

Choice "b" is correct. The price earnings ratio is 10, therefore, the price is equal to the price divided by earning anticipated for the coming year. The P/8 = 10, therefore, P = $80.

Choice "d" is incorrect. The proposed solution anticipates current earnings divided by price.

Choice "c" is incorrect. The proposed solution anticipates projected earnings divided by price.

Choice "a" is incorrect. The proposed solution anticipates price divided by current earnings.

5

Which of the following statements is true regarding the International Professional Practices Framework Code of Ethics?

a.

The Code of Ethics applies to both individual internal auditors and entities that conduct internal audits.

b.

The Code of Ethics is divided into three sections covering independence, objectivity, and competency.

c.

The Code of Ethics includes a comprehensive and detailed Standards of Conduct document.

d.

The Code of Ethics applies to individual internal auditors only.

Choice "a" is correct. The Code of Ethics issued as part of the IPPF applies to both individuals and entities that provide internal auditing services.

Choice "d" is incorrect. The Code of Ethics issued as part of the IPPF applies to both individuals and entities that provide internal auditing services.

Choice "c" is incorrect. The Code of Ethics issued as part of the IPPF does not have a companion Standards of Conduct document.

Choice "b" is incorrect. The Code of Ethics issued as part of the IPPF provides principles and rules of conduct under four headings: integrity, objectivity, confidentiality, and competency.

6

Investors are likely to view a high price earnings (P/E) ratio as an indication that:

a.

Earnings have growth potential

b.

Earnings have peaked and will likely fall

c.

There is no logical conclusion to reach about the relationship between price and earnings

d.

Earnings have peaked and will remain flat

Choice "a" is correct. The P/E ratio measures the amount that investors are willing to pay for each dollar of earnings per share. Higher P/E ratios generally indicate that investors are anticipating more growth and are bidding up the price of the shares in advance of performance.

Choice "d" is incorrect. High P/E ratios generally indicate investor confidence in earnings growth, not performance that has peaked.

Choice "b" is incorrect. High P/E ratios generally indicate investor confidence in earnings growth, not that performance will fall.

Choice "c" is incorrect. High P/E ratios give some insight into investor confidence of earnings growth.

7

Karl Kravitz, chief audit executive of the Carbon Corporation, applies internal audit procedures to the company's system of controls over accidental pollution and concludes that the likelihood and impact of accidental carbon pollution exceeds the company's risk appetite. If Carbon Corporation has adopted International Standards for the Professional Practice of Internal Auditing, how should Kravitz report his finding that residual risk exceeds risk appetite?

a.

Report the finding only to senior management.

b.

Report the finding directly to the board of directors.

c.

Report the risk exposure to senior management and, if unresolved, report the matter to the board of directors.

d.

Report the risk exposure directly to the Environmental Protection Agency (EPA) or other appropriate regulatory body.

Choice "c" is correct. When the chief audit executive believes that senior management has accepted a level of residual risk that may be unacceptable to the organization, the chief audit executive must discuss the matter with senior management. If the decision regarding residual risk is not resolved, the chief audit executive must report the matter to the board for resolution.

Choice "a" is incorrect. The chief audit executive should initially report his judgment that residual risks exceed risk appetite to senior management and would pursue the matter with the board in the event that the issue cannot not be resolved with senior management.

Choice "b" is incorrect. The chief audit executive would not directly report his judgement to the board of directors that residual risks exceed risk appetite without first trying to resolve the issue with senior management.

Choice "d" is incorrect. The chief audit executive is not required to report findings to external parties in this instance.

8

An analyst is reviewing a start up company with no net earnings. If the analyst wants to use a price multiples approach to valuation rather than a discounted cash flow method, the analyst would most likely select:

a.

P/E ratio projections

b.

Price-sales ratio projection

c.

Return on residual P/E ratio

d.

PEG ratio projections

 

Choice "b" is correct. Price-sales ratio projection approaches can provide meaningful information in the event that net earnings data is not available.

Choice "a" is incorrect. P/E ratios are not meaningful if earnings are either extremely small or a loss.

Choice "d" is incorrect. PEG ratios are based on the P/E ratio which is not meaningful when the analyzed company is either experiencing losses or has small earnings.

Choice "c" is incorrect. This is a distracter. There is no "return on residual P/E ratio" methodology.

9

According to the Performance standards included in the International Standards for the Professional Practice of Internal Auditing, effective management of internal audit activities is characterized in part by:

a.

Objective and relevant assurance.

b.

Contributions to the effectiveness and efficiency of governance.

c.

Conformity to the Standards and Code of Ethics.

d.

Consultation of practice aids.

According to the Performance standards included in the International Standards for the Professional Practice of Internal Auditing, effective management of internal audit activities is characterized in part by:

a.

Objective and relevant assurance.

b.

Contributions to the effectiveness and efficiency of governance.

c.

Conformity to the Standards and Code of Ethics.

d.

Consultation of practice aids.

10

Bander Co. is determining how to finance some long-term projects. Bander has decided it prefers the benefits of no fixed charges, no fixed maturity date and an increase in the credit-worthiness of the company. Which of the following would best meet Bander's financing requirements?

a.

Common stock.

b.

Bonds.

c.

Short-term debt.

d.

Long-term debt.

 

Choice "a" is correct. Common stock is an equity security that conveys ownership. Common stock does not require any payment, it does not mature and, because it increases equity while having no effect on debt, it decreases the debt equity ratio and increases the credit-worthiness of the firm.

Choice "b" is incorrect. Bonds are debt instruments that require specific fixed payments, mature at a specific time and increase debt. Immediately after issue, increases in debt increase the debt equity ratio and decrease credit worthiness.

Choice "d" is incorrect. Long-term debt requires specific fixed payments, includes maturity at a specific time and (by definition), increases debt. Immediately after issue, increases in debt increase the debt equity ratio and decrease credit worthiness.

Choice "c" is incorrect. Short-term debt requires specific fixed payments, includes maturity at a specific time and, by definition, increase debt. Immediately after issue, increases in debt increase the debt equity ratio and decrease credit worthiness.

11

According to the Independence and Objectivity standards included in the International Standards for the Professional Practice of Internal Auditing, the chief internal audit officer should confirm his independence to the board of directors:

a.

Annually.

b.

Quarterly.

c.

Every three years.

d.

Biannually.

Choice "a" is correct. The chief internal audit officer should confirm his independence to the board of directors annually according to the Independence and Objectivity standards included in the International Standards for the Professional Practice of Internal Auditing.

Choice "c" is incorrect. The chief internal audit officer should confirm his independence to the board of directors annually, not every three years, according to the Independence and Objectivity standards included in the International Standards for the Professional Practice of Internal Auditing.

Choice "d" is incorrect. The chief internal audit officer should confirm his independence to the board of directors annually, not biannually, according to the Independence and Objectivity standards included in the International Standards for the Professional Practice of Internal Auditing.

Choice "b" is incorrect. The chief internal audit officer should confirm his independence to the board of directors annually, not quarterly, according to the Independence and Objectivity standards included in the International Standards for the Professional Practice of Internal Auditing.

12

Which of the following statements is (are) correct regarding corporate debt and equity securities?

I.

Both debt and equity security holders have an ownership interest in the corporation.

II.

Both debt and equity securities have an obligation to pay income.

a.

Neither I nor II.

b.

II only.

c.

Both I and II.

d.

I only.

Choice "a" is correct. Neither I nor II is correct. Equity security holders have ownership interest while debt holders do not. Debt obligations require a periodic interest payment while equity securities only pay income to their holders when dividends are declared at the discretion of the Board of Directors.

Choice "d" is incorrect. Equity security holders have ownership interest while debt holders do not.

Choice "b" is incorrect. Debt obligations require a periodic interest payment while equity securities only pay income to their holders when dividends are declared at the discretion of the Board of Directors.

Choice "c" is incorrect. "Both I and II" is not correct. See explanations above.

13

A financial manager believes that his actions will cause earnings to increase and market prices to stay in proportion to increased earnings. The manager’s behavior illustrates:

a.

Confirmation bias.

b.

Excessive optimism.

c.

Overconfidence.

d.

Illusion of control.

 

Choice "d" is correct. A manager that believes their actions will have unerring impact on the market place is suffering from an illusion of control.

Choice "c" is incorrect. Overconfidence is purely a belief that judgments are correct.

Choice "b" is incorrect. Excessive optimism anticipates more favorable than unfavorable results.

Choice "a" is incorrect. Confirmation bias seeks data that supports a position without regard to evidence that contradicts the position or supports an opposing point of view.

14

Which of the following formulas should be used to calculate the economic rate of return on common stock?

a.

Market price per share divided by earnings per share.

b.

Dividends per share divided by market price per share.

c.

(Dividends + change in price) divided by beginning price.

d.

(Net income − preferred dividend) divided by common shares outstanding.

 

Choice "c" is correct. The economic rate of return on common stock measures the dividend income and capital growth in relation to the initial investment, the beginning price of the stock.

Choice "d" is incorrect. The proposed solution is earnings per share, a ratio generally computed as the earnings available to common shareholders (net income after payment of preferred shares) divided by the common shares outstanding.

Choice "a" is incorrect. Market price per share divided by earnings per share is the price/earnings or P/E ratio, not the economic rate of return on common stock.

Choice "b" is incorrect. The dividends per share divided by the market price per share does not represent the economic rate of return on common stock, the ratio includes change in stock value in the denominator rather than the numerator of the equation.

15

The Institute of Internal Auditors defines internal auditing in their International Standards for the Professional Practice of Internal Auditing as an:

a.

Institutional improvement system.

b.

Interdependent attestation service.

c.

Independent objective assurance and consulting activity.

d.

Integrated program evaluation function.

Choice "c" is correct. The IIA defines internal auditing as an independent objective assurance and consulting activity designed to add value and improve an organization's operations.

Choice "b" is incorrect. The IIA defines internal auditing as an independent rather than interdependent activity. The definition does not characterize internal auditing as an attest function.

Choice "d" is incorrect. Program audits or evaluations may be part of an internal auditor's work; however, the definition provided by the IIA characterizes internal auditing as an independent objective assurance and consulting activity. 

Choice "a" is incorrect. Although the adding value and, by extension, institutional improvement, is a purpose of internal auditing, the IIA definition characterizes internal auditing as an independent objective assurance and consulting activity.

16

Davis wants to buy shares of Epoch Corporation. If Davis uses a zero growth model, a desired rate of return of 20%, and a dividend of $10, what was Epoch’s price?

a.

$100

b.

$20

c.

$2

d.

$50

 

Choice "d" is correct. Using a zero growth model, the price of a company’s stock is equal to the dividend divided by the discount rate. P = D/R. In this case P = $10/20%. P = $50.

Choice "c" is incorrect. Price is not equal to 20% of the dividend.

Choice "b" is incorrect. Price is not equal to $20. The price is $50 per above.

Choice "a" is incorrect. Price is not equal to $100. The price is $50 per above

17

What would be the primary reason for a company to agree to a debt covenant limiting the percentage of its long-term debt?

a.

To cause the price of the company's stock to rise.

b.

To reduce the risk for existing bondholders.

c.

To lower the company's bond rating.

d.

To reduce the coupon rate on the bonds being sold

Choice "d" is correct. The primary reason for a company to agree to a debt covenant limiting the percentage of its long-term debt is to reduce the coupon rate on NEW bonds being sold. A debt covenant is a provision in a bond indenture (contract between the bond issuer and the bond holders) that the bond issuer will either do (affirmative covenants) or not do (negative covenants) certain things. In this question, the issuer would agree not to issue bonds in the future over a certain percentage of its long-term debt. Such a provision would be good for the potential bondholders and would probably reduce the coupon rate on the bonds being sold.

Choice "a" is incorrect. The primary reason for a company to agree to a debt covenant limiting the percentage of its long-term debt is not to cause the price of the company's stock to rise. Bond covenants affect bonds, not equity (at least not directly).

Choice "c" is incorrect. The primary reason for a company to agree to a debt covenant limiting the percentage of its long-term debt is not to lower the company's bond rating. Such a covenant might raise, not lower, a company's bond rating because there would be less risk.

Choice "b" is incorrect. The primary reason for a company to agree to a debt covenant limiting the percentage of its long-term debt is not to reduce the risk of existing bondholders, although a reduction in the risk of the existing bondholders certainly might result from such a covenant. As a general rule, more debt means more risk, less debt means less risk. So less debt would reduce the risk of all bondholders.

18

The International Professional Practices Framework (IIPF) organizes the authoritative guidance published by the IIA. Authoritative guidance is divided into two categories, mandatory and endorsed/strongly recommended. Which of the following IIPF authoritative guidance is not considered mandatory guidance?

a.

Code of Ethics.

b.

Definition of internal auditing.

c.

Position papers.

d.

International Standards for the Professional Practice of Internal Auditing.

 

Choice "c" is correct. Position papers are endorsed and strongly recommended but are not considered mandatory guidance of the International Professional Practices Framework (IPPF). The IPPF is composed of mandatory and endorsed/strongly recommended authoritative guidance as follows:

Mandatory

Definition of internal auditing

Code of Ethics

International Standards for the Professional Practice of Internal Auditing

Endorsed and strongly recommended

Position papers

Practice Advisories

Practice Guides

Choice "b" is incorrect. The definition of internal auditing is considered mandatory authoritative guidance of the International Professional Practices Framework (IPPF).

Choice "a" is incorrect. The Code of Ethics is considered mandatory authoritative guidance of the International Professional Practices Framework (IPPF).

Choice "d" is incorrect. The International Standards for the Professional Practice of Internal Auditing are considered mandatory authoritative guidance of the International Professional Practices Framework (IPPF).

19

Coldwell is using a constant growth dividend discount model to forecast the value of a share of common stock. Inherent in Coldwell's assumptions is the idea that:

a.

Compounding growth is linear.

b.

Stock price will grow at the same amount as the dividend.

c.

Dividends will grow at a rate faster than the presumed discount rate.

d.

Stock price will grow at the same rate as the dividend.

Choice "d" is correct. An underlying assumption of the constant growth model is the idea that the stock price will grow at the same rate as the dividend, thereby producing a constant growth rate.

Choice "a" is incorrect. Compounding growth is exponential, not linear.

Choice "c" is incorrect. The constant growth model assumes that the growth rate is less than the discount rate.

Choice "b" is incorrect. An underlying assumption of the constant growth model is the idea that the stock price will grow at the same rate (not amount) as the dividend as a means of producing a constant growth rate.

20

The former controller for National Manufacturing Corporation's Scranton manufacturing plant was promoted to National Manufacturing Corporation's internal audit division within the last six months. According to Independence and Objectivity standards included in the International Standards for the Professional Practice of Internal Auditing, the auditor:

a.

Should not be involved in either assurance or consulting activities for the Scranton Plant.

b.

Must not be involved with consulting activities for the Scranton Plan.

c.

May be involved in assurance and consulting activities for the Scranton Plant without limitations.

d.

Must not be involved with assurance activities for the Scranton Plant.

Choice "d" is correct. An internal auditor must refrain from assessing specific operations for which they were responsible within the previous year. Objectivity is presumed to be impaired if an internal auditor provides assurance services for an activity for which the internal auditor had responsibility within the previous year.

Choice "a" is incorrect. An internal auditor must refrain from assessing specific operations for which they were previously responsible but may be involved in consulting activities for specific operations for which they were previously responsible.

Choice "c" is incorrect. An internal auditor must refrain from assessing specific operations for which they were previously responsible but may be involved in consulting activities for specific operations for which they were previously responsible.

Choice "b" is incorrect. An internal auditor must refrain from assessing specific operations for which they were previously responsible but may be involved in consulting activities for specific operations for which they were previously responsible.

21

International Standards for the Professional Practice of Internal Auditing include implementation standards specific to both assurance and consulting activities. A major difference between assurance and consulting activities is that:

a.

Independence requirements are more restrictive for consulting services.

b.

The nature and scope of the assurance engagement are determined by the external auditor while the nature and scope of the consulting engagements are determined by the internal auditor.

c.

Objectivity is only required for assurance services.

d.

The nature and scope of the assurance engagement are determined by the internal auditor while the nature and scope of the consulting engagement are subject to agreement with the engagement client.

Choice "d" is correct. The nature and scope of an assurance engagement is determined by the internal auditor, however, the nature and scope of a consulting engagement is subject to agreement with the engagement client.

Choice "b" is incorrect. There is no requirement that the scope of assurance engagements be determined by the external auditor and consulting engagements typically involve an agreement with the engagement client.

Choice "c" is incorrect. Objectivity is required for both assurance and consulting activities.

Choice "a" is incorrect. Independence requirements (e.g., the one year restriction on internal audit activities covering areas in which the auditor had direct involvement) are more restrictive for assurance activities than consulting activities.

22

According to the Quality Assurance and Improvement standards included in the International Standards for the Professional Practice of Internal Auditing, all are true of a quality assurance program, except:

a.

Quality assurance must include both ongoing and periodic internal assessments and periodic external assessments.

b.

External reviewers must be CPAs.

c.

External assessments must occur at least every five years.

d.

Results of quality assurance reports should be reported to the board of directors and senior management.

Choice "b" is correct. External reviewers must demonstrate competence in two areas: the professional practice of internal auditing and the external assessment process. Although CPAs likely possess these traits, a CPA is not required for the external review.

Choice "a" is incorrect. According to the Quality Assurance and Improvement standards included in the International Standards for the Professional Practice of Internal Auditing, quality assurance must include both ongoing and periodic internal assessments and periodic external assessments.

Choice "c" is incorrect. According to the Quality Assurance and Improvement standards included in the International Standards for the Professional Practice of Internal Auditing, external assessments must occur at least every five years.

Choice "d" is incorrect. According to the Quality Assurance and Improvement standards included in the International Standards for the Professional Practice of Internal Auditing, results of quality assurance reports should be reported to the board of directors and senior management.

23

A basic premise of behavioral corporate finance is the idea that:

a.

Cost behavior determines valuation.

b.

Corporate finance is inherently quantitative and objective.

c.

Behavioral characteristics of financial managers can distort judgment.

d.

Corporate behavior will impact financial decisions.

Choice "c" is correct. The premise of behavioral corporate finance is the idea that behavioral characteristics of managers (such as overconfidence or excessive optimism) will distort management judgment.

Choice "a" is incorrect. Behavioral corporate finance is focused on human behavior, not cost behavior.

Choice "d" is incorrect. Behavioral corporate finance is focused on human behavior, not entity behavior.

Choice "b" is incorrect. Behavioral corporate finance recognizes that finance can be quantitative and objective but also recognizes that it can be driven by emotion.

24

The strong belief that a manager's decisions and evaluations are correct, leading investors to overemphasize their abilities, is best characterized as:

a.

Excessive optimism

b.

Illusion of control

c.

Overconfidence

d.

Confirmation bias

 

Choice "c" is correct. The manager’s belief that they are generally correct is overconfidence.

Choice "a" is incorrect. The manager’s belief that results will generally be positive is excessive optimism.

Choice "d" is incorrect. Confirmation bias is when managers use data that confirms their conclusions and ignores data that challenges their ideas. 

Choice "b" is incorrect. The erroneous belief that the financial manager has control over valuation outcomes that are really the result of market forces.

25

A company evaluating the advantages and disadvantages of short-term and long-term financing options would note which of the following two characteristics to be true?

~Short-term Financing
~Long-term Financing
a.

Decreased interest rate risk

Increased credit risk

b.

Decreased interest rate risk

Decreased credit risk

c.

Increased interest rate risk

Increased credit risk

d.

Increased interest rate risk

Decreased credit risk

 

Choice "d" is correct. Short-term financing options result in lower interest rates but higher interest rate risks because rates will fluctuate more dramatically for short-term issues than long-term issues. On the other hand, with long-term financing, credit risk will decrease because the company will seek refinancing less frequently and thereby have less credit risk or opportunity that the rates associated with debt will be changed unfavorably or that financing will be denied altogether.

Choice "b" is incorrect. Although long-term financing results in decreased credit risk, short-term financing yields increase, not decrease, interest rate risk.

Choice "c" is incorrect. Although short-term financing options result in increased interest rate risk, long-term financing will result in decreased, not increased, credit risk.

Choice "a" is incorrect. Interest rate risk increases, not decreases, for short-term financing and credit risk decreases, not increases, for long-term financing.

26

A valuation estimation technique that can be adapted to start up companies and other situations where earnings are very low is:

a.

Price Earnings (P/E) ratio.

b.

Price Earnings Growth (PEG) ratio.

c.

Constant Growth (D/(r-g)).

d.

Price Sales ratio.

Choice "d" is correct. The price sales ratio uses sales per share as a basis for valuation and can be used in start-up situations or under conditions where earnings data is not meaningful.

Choice "a" is incorrect. P/E projections rely on meaningful earnings figures.

Choice "b" is incorrect. PEG projections rely on meaningful earnings figures.

Choice "c" is incorrect. Constant growth models are less adaptable to low earnings situations than the price sales ratio. Constant growth would require adjustments to return and growth amounts to produce realistic results.

27

According to the Performance standards included in the International Standards for the Professional Practice of Internal Auditing, results of a preliminary risk assessment are used in engagement planning for the determination of the engagement:

a.

Scope.

b.

Work plan.

c.

Resource allocation.

d.

Objectives.

Choice "d" is correct. Engagement objectives must reflect the results of a preliminary risk assessment performed prior to beginning the engagement.

Choice "b" is incorrect. The work plan is designed to achieve engagement objectives, established in response to the risk assessment.

Choice "c" is incorrect. Resource allocations are determined in response to objectives established in response to the risk assessment.

Choice "a" is incorrect. Engagement scope is established to achieve engagement objectives.

28