Why Do Entrepreneurs Commit Financial Statement Fraud?
There are several motivations for financial statement fraud among entrepreneurs, including:
1. Attracting Investors: Entrepreneurs may inflate revenues or profits to make their venture appear more attractive to potential investors. 2. Securing Loans: Misrepresenting financial health can help secure loans or better terms from financial institutions. 3. Meeting Expectations: Entrepreneurs may feel pressured to meet unrealistic growth or performance expectations set by stakeholders or themselves. 4. Personal Gain: In some cases, the primary motivation may be personal financial gain, such as bonuses or stock options tied to financial performance.