Dalian Company is a Chinese state-owned enterprise. This means that ownership of the company rests in one of the ministries of the Chinese central government. Ministry officials have decided to sell a portion (40%) of the government’s ownership interest in Dalian to outside investors, including foreign investors. The proceeds from this initial public offering (IPO) will flow into the operating budget for the ministry. Zhang Tianfu is Dalian Company’s senior manager. He is preparing for the IPO. Among other things, he is working with the company’s accountants to get the financial statements for the past three years ready for use by external investors. With respect to these financial statements, what conflicting incentives face Mr. Zhang as he prepares for the IPO?