One of the Characteristics of a Principal-Agent Relationship Is

question 17

Multiple Choice

One of the characteristics of a principal-agent relationship is:

• A)The owners of the company are not involved in the daily management of the company.
• B)The owners of the company hire an auditor to run the company for them and to make daily decisions for the company.
• C)The owners have more knowledge than management about the daily operations of the company.
• D)Outsiders benefit when a manager is hired by owners to protect their interests in the company because the information available to outsiders is more likely to correspond to financial accounting standards.

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Definitions:

Integrators

Organizational members permanently assigned to facilitate coordination between departments.

Informal Communication

Refers to the casual and unstructured exchange of information between individuals or groups without following the formal channels of communication.

Technical Interface

The point of interaction or communication between a user and a system, focusing on hardware, software, and protocols.

Production

The process of creating, manufacturing, or improving goods and services.