Ethics Question - Please answer and I will stop studying studying

Muddahudda

I alway get this confused and want to make sure I have this right....

If a client offers you additional compensation for achieving some set results each....you notify in writing to the employer...however, dont have to get approval.

If you work at a firm as PM and want to take on additional independent clients while still working at your current firmm, you MUST receive written approval from all parties involved.

correct?

mp3bu

yes, and yes

aidebaobao

written approval needed for both but if you take the comp in first case you are still in violation of code because of independent and objectivity not due to disclosure of conflict and additional comp. arrangement as you would be if you did not get approval.

ohai

N.VanCandidate Wrote:
-------------------------------------------------------
> written approval needed for both but if you take
> the comp in first case you are still in violation
> of code because of independent and objectivity not
> due to disclosure of conflict and additional comp.
> arrangement as you would be if you did not get
> approval.

bro, you can definitely accept additional comp from a client....CFAI txt vol 1 page 75 - example 1

but I think you are right that written consent is required for both....

strikethree

N.VanCandidate Wrote:
-------------------------------------------------------
> written approval needed for both but if you take
> the comp in first case you are still in violation
> of code because of independent and objectivity not
> due to disclosure of conflict and additional comp.
> arrangement as you would be if you did not get
> approval.

Wrong. You can accept additional comp. How it affects your judgment is the issue. With only that amount of info, there is no violation

susana

BlueCollarHero Wrote:
-------------------------------------------------------
> N.VanCandidate Wrote:
> --------------------------------------------------
> -----
> > written approval needed for both but if you
> take
> > the comp in first case you are still in
> violation
> > of code because of independent and objectivity
> not
> > due to disclosure of conflict and additional
> comp.
> > arrangement as you would be if you did not get
> > approval.
>
> bro, you can definitely accept additional comp
> from a client....CFAI txt vol 1 page 75 - example
> 1
>
> but I think you are right that written consent is
> required for both....


Yes. It says consent is required, so that means written consent from employer, never verbal.

lcai

Is in it that you can accept additional compensation if it is for past performance but not if it is to entice you to do better in the future because that would put you at a risk of violating independence & objectivity as you will probably favor that client's account which also brings in the issue of fair dealing...

Analyze_This

Does anyone have a bottom line on this?

Unforseen

Without additional info, you can't make that assumption. The debate is, can one accept additional compensation? Yes absolutely. As far as the requisite action to take before accepting it, it's been answered.

nannan66

Straight out of the CODE:

"Do not offer, solicit, or accept any compensation that could compromise independence or objectivity"