Management may feel pressure to maintain debt covenants,which is a deterrent to fraud.

Name: Management may feel pressure to maintain debt covenants,which is a deterrent to fraud.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

While maintaining debt covenants can put pressure on management, it is not typically considered a deterrent to fraud. In fact, the pressure to meet financial ratios required by debt covenants can sometimes incentivize management to commit fraud to appear in compliance.

Management May Feel Pressure to Maintain Debt Covenants,which Is a Deterrent