Which of the Following Is Least Likely to Represent an Agency

question 37

Multiple Choice

Which of the following is least likely to represent an agency problem?

• A) Lavish spending on expense accounts
• B) Plush remodeling of the executive suite
• C) Excessive investment in "safe" projects
• D) Executive incentive compensation plans

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Definitions:

Respondeat Superior

Latin for “let the superior speak”; the principle by which liability for harm caused by an agent/ employee is held by the principal/employer.

Corporate Liability

The legal responsibility that a corporation can face for the actions or inactions of its directors, officers, or employees.

Agents

Individuals authorized to act on behalf of another person or entity, often in a business capacity.

Fiduciary Duty of Care

A legal obligation of one party to act in the best interest of another. When related to fiduciary duty, it specifically refers to the care that should be taken by the fiduciary.