The congruence problem can be avoided by assessing managerial performance using financial accounting measures that are grounded in generally accepted accounting principles.

Question

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The congruence problem refers to the misalignment between the objectives of the organization and the objectives pursued by its managers. Using financial accounting measures grounded in generally accepted accounting principles (GAAP) does not necessarily avoid this problem, as these measures may not fully capture all aspects of managerial performance or align with the long-term strategic goals of the organization.

The Congruence Problem Can Be Avoided by Assessing Managerial Performance