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ACFE CFE-Financial-Transactions-and-Fraud-Schemes Exam - Topic 1 Question 125 Discussion

Which of the following is NOT the reason why senior management will overstate business statement?
A) Comply with debit covenants
B) Meet personal performance criteria
C) Trigger performance related compensation
D) Show a pattern of growth to support sale of a business

ACFE CFE-Financial-Transactions-and-Fraud-Schemes Exam - Topic 1 Question 125 Discussion

Actual exam question for ACFE's CFE-Financial-Transactions-and-Fraud-Schemes exam
Question #: 125
Topic #: 1
[All CFE-Financial-Transactions-and-Fraud-Schemes Questions]

Which of the following is NOT the reason why senior management will overstate business statement?

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Suggested Answer: A

by Rosamond at May 05, 2026, 06:31 PM

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Gladys
4 days ago
I feel confused about the wording.
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Lynette
9 days ago
True, but they relate to management's interests.
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Yaeko
15 days ago
A and B seem more likely reasons.
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Karina
20 days ago
I agree with D.
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Lynette
25 days ago
It’s about selling, not overstating.
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Gladys
1 month ago
Why D?
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Lynette
1 month ago
I think D is the answer.
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Yaeko
1 month ago
This question is tricky.
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Anglea
2 months ago
D) Show a pattern of growth to support sale of a business sounds legit to me.
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Dulce
2 months ago
Wait, are they really overstating just to sell a business? That seems sketchy!
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Paul
2 months ago
C) Trigger performance related compensation is super common too.
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Cyril
2 months ago
I think B) Meet personal performance criteria is the main one!
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Mitzie
2 months ago
A) Comply with debit covenants is definitely a reason.
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Judy
2 months ago
D seems like a plausible reason too, but I can't recall if it's the one that doesn't fit. This is tricky!
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Eleni
4 months ago
I practiced a similar question where overstating was linked to performance-related compensation, so I might lean towards B being a reason.
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Emelda
4 months ago
I think the answer is A because complying with debt covenants usually involves being more conservative, but I could be wrong.
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Lino
4 months ago
I remember discussing how senior management might overstate statements to meet personal performance criteria, but I'm not sure if that's the only reason.
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