Which of the following statements about agency theory is NOT true?
A) Agency theory tends to focus on the stewardship role of accounting information.
B) Agency theory develops ideas about how the agent can be induced to act properly.
C) Conflict of interest is unfavourable and to be avoided at all costs.
D) For the agent,effort is costly and therefore to be minimised.

Question

Quizplus · Accepted Answer

Conflict of interest is an inherent part of agency relationships, and agency theory provides insights into how to manage conflicts of interest effectively rather than avoiding them entirely. Agency theory focuses on understanding how to align the interests of the agent and principal, given that their interests may not always be completely aligned.

Which of the Following Statements About Agency Theory Is NOT