Corporate control — Accounting blunders in a factory: what should be done? Statement: Serious blunders have been detected in the Accounts section of a factory. Which courses of action follow logically?

Introduction / Context:Material irregularities in accounts call for both diagnostic review and accountability. The proposed actions are (I) appoint an efficient audit team to check accounts and (II) issue show-cause notices to employees involved in the irregularity. We must determine whether each logically follows.

Given Data / Assumptions:

• Serious accounting blunders exist.
• Cause, scope, and intent (error vs. fraud) are not yet fully known.
• Due process and internal controls are valued.

Concept / Approach:

• An independent audit establishes facts, quantifies impact, and identifies control failures.
• Show-cause notices initiate fair disciplinary processes, allowing responses before any sanctions.

Step-by-Step Solution:

Verification / Alternative check:

Why Other Options Are Wrong:

Common Pitfalls:

Final Answer: