The Chartered Institute of Management Accountants (CIMA) has warned that linking directors pay to EPS or return

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The Chartered Institute of Management Accountants (CIMA) has warned that linking directors’ pay to EPS or return on assets is open to abuse, since these are not the objective measures they might appear.

(a) Identify four ways in which the directors might manipulate the EPS and return on assets without breaching existing standards.

(b) Suggest two alternative bases for setting criteria for bonuses.

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Financial Accounting And Reporting

ISBN: 9781292255996

19th Edition

Authors: Barry Elliott, Jamie Elliott

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Question Posted: Nov 04, 2022 08:51 AM

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The Chartered Institute of Management Accountants (CIMA) has warned that linking directors pay to EPS or return

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a The directors might manipulate the EPS and return on assets without breaching existing standards in a number of ways Firstly they might use accounti...View the full answer

Financial Accounting And Reporting

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