Explain a few situations where the Management or the Board of Directors are personally involved in the entity’s financial performance.

• Have significant financial interests in the entity
• Significant portions of their compensation like bonuses,stock options and earn-out arrangement begin contingent upon achieving aggressive target s for stock price, operating results, financial position, or cash flow
• Personal guarantees of debts of the entity.

{ See article on Excessive pressures on Management and  article on aggressive accounting for revenue or aggressive revenue recognition }