ACFE Exam CFE-Financial-Transactions-and-Fraud-Schemes Topic 9 Question 90 Discussion

Actual exam question for ACFE's CFE-Financial-Transactions-and-Fraud-Schemes exam

Question #: 90
Topic #: 9

[All CFE-Financial-Transactions-and-Fraud-Schemes Questions]

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

AComply with debit covenants

BMeet personal performance criteria

CTrigger performance related compensation

DShow a pattern of growth to support sale of a business

Show Suggested Answer

Suggested Answer: B

by Xochitl at Jun 22, 2024, 10:48 AM

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Casey

1 months ago

Seriously, Option A? Who cares about debt covenants when you can inflate those numbers and line your own pockets? It's like a game of 'How Big Can We Make the Numbers Go?' - and the senior management is always the winner!

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Sylvia

20 days ago

B) Meet personal performance criteria

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Darell

23 days ago

A) Comply with debit covenants

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Reita

2 months ago

I'm going with Option A on this one. Complying with debit covenants? That's just boring old compliance. Where's the fun in that? I'm all about that personal performance criteria and juicy compensation. Let's get wild!

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Shenika

2 months ago

Ah, the age-old question of why senior management would overstate business statements. I'd say showing a pattern of growth to support the sale of a business is the one that doesn't quite fit. Unless, of course, they're trying to pull a fast one on the buyers. Sneaky, sneaky!

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Louisa

17 days ago

It's definitely a risky move, especially if they get caught.

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Darnell

18 days ago

Maybe they're trying to make the business look more attractive than it actually is.

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Marti

19 days ago

I agree, showing a pattern of growth to support the sale of a business seems a bit fishy.

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Ming

2 months ago

Option A has got to be the odd one out here. I mean, who wouldn't want to meet their personal performance criteria and trigger that sweet, sweet performance-related compensation? Sign me up for that!

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Solange

1 months ago

Trina: True, that could be a big factor for them.

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Elbert

1 months ago

User 3: I think senior management might prioritize showing growth to support sale of the business though.

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Tiera

2 months ago

Yeah, those incentives can definitely lead to overstating business statements. It's all about personal gain.

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Matthew

2 months ago

I agree, meeting personal performance criteria and triggering performance-related compensation are strong motivators for senior management.

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Trina

2 months ago

User 2: Yeah, meeting personal performance criteria and getting that compensation is definitely more tempting.

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Leslie

2 months ago

User 1: I agree, option A seems like the odd one out.

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Fletcher

3 months ago

Hmm, this is a tricky one. I think the reason why senior management would NOT overstate business statements is to comply with debit covenants. Gotta keep those creditors happy, am I right?

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