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) Something to be eliminated before a contract can be finalised.
D) For the agent,effort is costly and therefore to be minimised.

Question

Quizplus · Accepted Answer

Agency theory is concerned with the relationship between a principal and an agent, where the agent acts on behalf of the principal. The theory focuses on how to align the interests of the agent with those of the principal to minimize conflicts of interest. Therefore, C (Something to be eliminated before a contract can be finalised) is not a true statement about agency theory.

Which of the Following Statements About Agency Theory Is NOT