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:
Action I (audit) is essential to verify and document the blunders, trace entries, and recommend control fixes.Action II (show-cause) is appropriate if specific employees appear linked to irregularities; it preserves natural justice.Both actions therefore follow logically and complement each other.
Verification / Alternative check:
Standard corporate governance uses audits plus disciplinary procedures; this aligns with best practices.
Why Other Options Are Wrong:
Only I or Only II: Each alone is incomplete either factually (no audit) or procedurally (no accountability step).Either / Neither: Not consistent with the seriousness of the issue.
Common Pitfalls:
Jumping to punishment without facts or ignoring accountability after confirmation. Both must proceed.
Final Answer:
Both I and II follow
Discussion & Comments