The Conflict Between Principals and Agents Arises Because

question 43

Multiple Choice

The conflict between principals and agents arises because:

• A)agents often do not know the extent of their authority.
• B)agents act without specific authority form their principals.
• C)agents prefer actions that will increase their own welfare instead of the welfare of their principals.
• D)principals are not willing to give agents the authority that the need to protect the welfare of their principals.

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Definitions:

Traditional Accounting System

An accounting practice that uses manual processes and ledgers for bookkeeping without extensive technology.

Lean Principles

A set of management practices that aim to minimize waste and increase efficiency in manufacturing processes.

Inventory Shortages

Situations where the actual inventory count is less than what is recorded on the books, indicating possible issues such as theft or errors.

Volatile Times

Periods characterized by high levels of uncertainty, unpredictability, or instability, often referring to economic or financial market conditions.