Hot potato this month's dilemma.

PositionUpdate

I am a CIMA member and have recently been appointed as director of finance for a private company and am responsible for the year-end accounts. My salary and related bonus is based on the outcome of this. This was established as a key performance indicator of my predecessor. Although, from what I can tell, the accounts and reporting have been solid in the past few years, I do feel that this is an inappropriate indicator, but my CEO and HR want to retain it.

Our response:

Although one can imagine why management might want to set this indicator, it is short-sighted. For your compensation to be tied to the outcome of the accounts could create a risk for the management, and for yourself. Such tying to reward could create a conflict of interest (Section 310 of CIMA's ethics code) as in your position there is potential to alter the outcome of the accounts and undermine objectivity (Section 120 of the code) and professional...

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