Criterion is the standard against which a test or a test score is evaluated; this standard may take many forms, including a specific behavior or set of behaviors and criterion keying is the process of using criterion groups to develop test items, wherein the scoring or keying of items has been demonstrated empirically to differentiate among groups of testtakers.
The statement that an instrument created using the criterion keyed approach is appropriate for clients who may attempt to "fake-good" is true.