Think about motivations

Built into many simulations, you have certain motivations that you need to consider which may play a real role in the simulations.

Motivations can lead to bias.


What’s the motivation of a company?

It can be many things.

Some are motivated to survive. If there are investors or bank covenants which could lead to the bank calling a loan, the company will be motivated to meet whatever conditions are set in the bank covenant and therefore may have a bias to overstate one thing or another. Almost with certainty, if there is a covenant mentioned in the case you need to do a calculation to determine if the company has breached its covenant.

Perhaps the company needs a clean audit opinion and this has led management to be less then honest about something.


People can also have motivations.

Perhaps an organization has stock options or a bonus program which pays out based on gross sales or net profit or some other measure. Management wants their bonus and this may create a bias to overstate sales or profit in order to gain the bonus, especially if the bonus is a percentage of sales or profit. Money motivates people, at least in UFE cases.

Other user needs could include tax issues, everyone wants to reduce taxes but is there a bias that’s resulting in tax evasion? Or maybe the sale price of a company is based on assets in which case there is a incentive to maximize the assets.

This sort of thing is best thought about during your analysis phase as this is the best times to look at the bigger picture and try to link all these things together and integrate it into your analysis and response.


While bias doesn’t always mean fraud, it’s certainly one element of the fraud triangle. Often, this is the stuff that UFE PQs are made of. A quick minute of thought in your analysis can add some overall depth and integration to your analysis.

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