The goals that a company’s investors may have for long-term value creation may come into conflict with incentives that are introduced by short-term pressures, with examples including analysts’ expectations, internal profit targets, and compensation bonuses tied to short-term performance metrics. If there isn’t synergy between short-term goals and long-term strategy, an emphasis on short-term results can increase the risk of financial reporting fraud.
This webcast from the Anti-Fraud Collaboration includes a panel of experts discussing what successful companies do to reinforce the alignment between potentially conflicting goals.