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Which of the following is NOT the reason why senior management will overstate business statement?
Suggested Answer: A
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23 comments · newest first
CA
Carlee
18 days ago
True, but D is about growth. It’s not a direct reason for overstating.
CH
Chantell
24 days ago
I feel like C is also a big motivator. Performance pay drives exaggeration.
JO
Johna
29 days ago
Agreed, D seems least likely. A and B are common reasons.
TA
Tanja
1 month ago
I think it's D. Selling a business doesn't need overstated statements.
YA
Yaeko
1 month ago
I hope I get it right!
KA
Karina
1 month ago
Same here, but I think D stands out.
GL
Gladys
2 months ago
I feel confused about the wording.
LY
Lynette
2 months ago
True, but they relate to management's interests.
YA
Yaeko
2 months ago
A and B seem more likely reasons.
KA
Karina
2 months ago
I agree with D.
LY
Lynette
2 months ago
It’s about selling, not overstating.
GL
Gladys
3 months ago
Why D?
LY
Lynette
3 months ago
I think D is the answer.
YA
Yaeko
3 months ago
This question is tricky.
AN
Anglea
3 months ago
D) Show a pattern of growth to support sale of a business sounds legit to me.
DU
Dulce
3 months ago
Wait, are they really overstating just to sell a business? That seems sketchy!
PA
Paul
3 months ago
C) Trigger performance related compensation is super common too.
CY
Cyril
4 months ago
I think B) Meet personal performance criteria is the main one!
MI
Mitzie
4 months ago
A) Comply with debit covenants is definitely a reason.
JU
Judy
4 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!
EL
Eleni
5 months ago
I practiced a similar question where overstating was linked to performance-related compensation, so I might lean towards B being a reason.
EM
Emelda
6 months ago
I think the answer is A because complying with debt covenants usually involves being more conservative, but I could be wrong.
LI
Lino
6 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.