What is agency theory? How does corporate governance the issues raised by agency theory?
What will be an ideal response?
Agency theory explores the problems that arise because the owners of the firm do not typically manage the firm, and it devises ways to resolve these problems. This is often called the separation of owneship and control. A manager of a firm, in particular the chief executive officer (CEO), is viewed as an agent who contracts with various principals—most importantly the firm's shareholders but also the firm's creditors, suppliers, clients, and employees. The principals must design contracts that motivate the agent to perform actions and make decisions that are in the best interests of the principals.
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"According to Nielsen research, 40 percent of U.S. consumers are responsible for 75 percent of music spending" This quote is an important example to remember why we segment the market by ____.
A. Demographic B. Usage Rate C. Psychographic D. Geographic Location
Which of the following statements is true of managerial accounting?
A) The external stakeholders of a company are the primary users of managerial accounting. B) Managerial accounting information is used to help managers plan and control their operations. C) An external audit by an independent CPA is required for managerial accounting information. D) Managerial accounting information must comply with Generally Accepted Accounting Principles.