Senior Management Is Most Likely to Understate Business Performance in the Financial

Multiple Choice

Senior management is most likely to understate business performance in the financial statements for which of the following reasons?

A) To reduce the value of an owner-managed business for purposes of a divorce settlement
B) To comply with loan covenants
C) To increase the value of a corporate unit whose management is planning a buyout
D) To trigger performance-related compensation or earn-out payments