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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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Anglea
10 hours ago
D) Show a pattern of growth to support sale of a business sounds legit to me.
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Dulce
6 days ago
Wait, are they really overstating just to sell a business? That seems sketchy!
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Paul
11 days ago
C) Trigger performance related compensation is super common too.
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Cyril
16 days ago
I think B) Meet personal performance criteria is the main one!
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Mitzie
21 days ago
A) Comply with debit covenants is definitely a reason.
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Judy
26 days 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
2 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
3 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
3 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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