Exam CAPM topic 1 question 305 discussion

C. Predictive, because of the high risk that the company can be fined This option is the best fit because the predictive approach emphasizes planning, structure, and adherence to timelines. Since there is a high risk associated with non-compliance, it is crucial to follow a well-defined plan to implement the changes promptly and correctly. While the tax law is likely clear and stable, the context of implementation—including the urgency, potential risks, and the complexity of modifying an accounting system—leans more towards C (predictive). It emphasizes the need for a structured and comprehensive approach to minimize risks associated with compliance. In situations where regulations are involved, erring on the side of caution and thoroughness (as in the predictive approach) is generally more prudent.

A - a new tax law would be clearly defined and would not change within the year.

B - Adaptive, this is a new tax law in a short period of 1 year