Under the Efficiency Perspective of PAT,where Regulation Bans an Accounting

question 30

Multiple Choice

Under the efficiency perspective of PAT,where regulation bans an accounting method being used by a particular organisation:

• A) This will lead to lower monitoring costs because management does not have as wide a range of methods to choose from.
• B) This will lead to more useful reporting of performance because principals will be able to compare reports between different organisations.
• C) This will lead to inefficiencies, as the financial statements will no longer provide the best reflection of the performance of the organisation.
• D) This decreases the chance that agents will undertake opportunistic behaviour to provide principals with creative accounts.
• E) None of the given Answers.

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