[Solved] BRIEFLY DESCRIBE THE ASSUMPTIONS OF TRADITIONAL AGENCY THEORY

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[Solved] BRIEFLY DESCRIBE THE ASSUMPTIONS OF TRADITIONAL AGENCY THEORY

This paper revolves around Research in Financial Reporting, You are to briefly describe the assumptions of traditional agency theory, how traditional agency theory has influenced two aspects of accounting, influences have the assumptions of traditional agency theory had on approaches to the compensation, provide two criticisms of traditional agency, and discuss one alternative theory to agency theory. Moreover, you are asked to explain how does a stewardship and a valuation focus influence the measuring and reporting of financial accounting information. You are required to answer all the mentioned questions in this paper accordingly. 

Question 1 Research in Financial Reporting

It has been said that “agency theoretical literature in accounting has frequently stressed possible difficulties in pursuing stewardship and valuation usefulness simultaneously” . When answering the

following questions you are expected to use appropriate in-text references. Four (4) marks will be allocated based on the appropriateness of your in-text

references

1. Briefly describe the assumptions of traditional agency theory.

(6 marks)

1. b. Explain how traditional agency theory has influenced two aspects of accounting (do not provide an explanation about linking performance

measurement and compensation; choose two other aspects of accounting

that traditional agency theory has influenced).

(6 marks)

1. What influences have the assumptions of traditional agency theory had on approaches to the compensation?

(6 marks)

1. d. Outline two criticisms of traditional agency the

(6 marks)

1. e. Discuss one alternative theory to agency theory and explain the deficiencies in agency theory that the alternative theory attempts to overcome.

(6 marks)

1. How does a stewardship focus influence the measuring and reporting of financial accounting information?

(5 marks)

1. g. How does a valuation focus influence the measuring and reporting of financial accounting information?

(5 marks)

1. h. Explain the conflicting viewpoints of pursuing stewardship and valuation usefulness simultaneously.

(6 marks)

Four (4) marks will be allocated based on the appropriateness of your in-text references

(4 marks)

Question 2    Research in Auditing

(total 50 marks)

Read the study by Agyei et al. (2013) as well as the study by Gunathilaka

(2012).

1. Briefly outline the research aims of each study.

(4 marks)

1. b. Review the research objectives in the study by Gunathilaka (2012), write a research hypothesis that would be suitable for the stud Use the null

hypothesis format.

(4 marks)

1. Explain how variables are measured in each of the two studies. Comment on which study uses a more rigorous approach, stating reasons why you believe one approach is superior in its rigor.

(8 marks)

1. d. Explain how each study defines the population that is used for selecting participant Discuss the appropriateness of the choice of population to

address the aims of each research study.

(8 marks)

1. e. Explain how each study determines the number of participants invited to participate in the study. Comment on the appropriateness of the number of

participants chosen for each study.

(4 marks)

1. What information is provided in each study about how the questionnaires were sent/distributed to the participants?

(2 marks)

1. g. Define non-response bi

(2 marks)

1. h. What has been done in each study to address non-response bias?

(2 marks)

1. i. Outline the response rate in each study and whether you think the response rates are adequate in each stud

(4 marks)

1. j. Explain how each study goes about analysing the data that is collected and comment on which approach you think is more rigorous, stating reasons why you believe one approach is superior in its rig

(8 marks)

1. Briefly outline two other significant flaw (not mentioned above) that you have noticed in one or both of the studies.

(4 marks)