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Why pat assumes problems between managers and shareholders

Assignment Help Accounting Basics
Reference no: EM132156174

Part A -

a) Explain agency theory and contracts in the context of Positive Accounting Research (PAT)?

b) What is the bonus hypothesis of PAT?

c) Explain what 'creative accounting' is and can it explain the behaviour of contracting parties in PAT?

Part B -

a) What is the main purpose of simplifying assumptions of Positive Accounting Theory (PAT)?

b) Explain why PAT assumes 'problems' between managers and shareholders? Suggest ways shareholders can minimise these "problems"

c) Define 'creative accounting', and its relationship with ethical dilemma for managers.

Reference no: EM132156174

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