Online from: 1992
Subject Area: Accounting and Finance
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|Title:||AGENCY THEORY: AN APPROACH TO INCENTIVE PROBLEMS IN MANAGEMENT ACCOUNTING|
|Author(s):||Joshua Ronen, (Stern School of Business, New York University), Kashi R, Balachandran, (Stern School of Business, New York University)|
|Citation:||Joshua Ronen, Kashi R, Balachandran, (1995) "AGENCY THEORY: AN APPROACH TO INCENTIVE PROBLEMS IN MANAGEMENT ACCOUNTING", Asian Review of Accounting, Vol. 3 Iss: 1, pp.127 - 151|
|Article type:||General review|
|DOI:||10.1108/eb060655 (Permanent URL)|
|Publisher:||MCB UP Ltd|
|Abstract:||There are two problems when a principal invests capital and hires an agent to do the work. The problems relate to inducing the agent to exert the optimal effort and to effect an optimal risk sharing arrangement. This paper introduces the concepts and enumerates the fundamental solutions to this agency problem. This approach is very useful in the managerial accounting area of determining the value of accounting information for setting performance evaluation and incentive payment schemes.|
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