Unfortunately, the owners aren’t the only stakeholders in this situation. The regular work-in-process reports are due to the bank, which reviews them carefully on a monthly basis. These projected losses will cause Frame Tec to be in violation of its financial covenant requirements. Sarah wonders, “Since the work-in-process schedules are quite subjective, would anyone question my disclosure of this problem in a few months? Would the bank ever realize that I knew it was a problem? Will future projects be profitable?”