ACCT 4340 Lecture Notes - Lecture 4: Loose Coupling, Internal Control, Stakeholder Theory
19 Apr 2016
School
Department
Course
Professor
Document Summary
Help us understand what happens in the world e. g. agency theory. It examines a range of relationships between the entity and: Everyone acts in their own self interest to maximize wealth (or other self interests). ^bounded rationality- still going to try to choose best option for us, cant because there are constraints. Criteria will be influenced by culture, social norms, expectations etc. These choices will be affected by these constraints. Zimmerman article based on rational economic person assumption. Contracting theory suggests that the organization is characterised as a legal nexus of contracts". With contracting parties having rights and responsibilities under these contracts positive accounting theory focuses on: managerial contracts, and, debt contracts. These are agency contracts used to manage relationships where there is a separation. Delegation of authority, assignment of responsibility, transfer of money. (resources) 4th thing: consequence if you fuck up accounting is mobilized through demand and supply of information.
