Company XYZ had a long-standing relationship with a leading law firm. In fact, the law firm's business with this company was one of its most profitable relationships. If the law firm decides that it no longer wants to conduct business with the company, this is:
A) Indicative that the company might have a lot of customer lawsuits against it
B) Not any sort of meaningful indicator of fraud activity
C) A large cause for concern that financial statement fraud may be occurring
D) An indication that the client has likely outgrown the law firm

Question

Quizplus · Accepted Answer

The decision of a law firm to stop doing business with a company, especially when it is a profitable relationship, could be a red flag for financial statement fraud or other serious issues within the company.

Company XYZ Had a Long-Standing Relationship with a Leading Law