Individuals who have a higher-than-average probability of experiencing a loss often try to pass as average risks in order to obtain insurance at more favorable rates. What functional area at insurance companies attempts to detect such individuals?

Frank Maple, CPA, represents his brother Joe Maple and Joe's business partner Bill Smith. Joe Maple and Bill Smith are equal shareholders in the Joe & Bill Corporation. The Internal Revenue Service examined the corporation and determined that one of the shareholders committed fraud, but could not determine which shareholder it was. Frank has made an appointment with the Internal Revenue Service to determine which partner was guilty. Which of the following statements reflects what Frank should do in accordance with Circular 230?

A. Frank should meet with the Internal Revenue Service and try to convince the examiner that each shareholder is equally guilty. B. Advise Joe & Bill that they should dissolve the corporation, thereby making it difficult for the Internal Revenue Service to pursue the issue. C. Advise Joe & Bill that he cannot represent them because there is a conflict of interest. D. Advise Joe & Bill on creating documents that will convince the Internal Revenue Service that neither shareholder is guilty of fraud.

Potential markets can be subdivided into:

A) latent and parallel markets. B) existing and incipient markets. C) latent and incipient markets. D) existing and latent markets. E) incipient and existing markets.