Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government. Organizations try to solve it by instituting measures but no organization can remedy it completely. How would you analyze this statement within the context of a limited liability company and what are the possible remedies to this problem?

Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government. Organizations try to solve it by instituting measures but no organization can remedy it completely. How would you analyze this statement within the context of a limited liability company and what are the possible remedies to this problem?

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter3: Internal Control Issues

Section3.8: The Boeing Company

Problem 1Q

See similar textbooks

Similar questions

Agency problems are said to be inherent in the corporate form of an organization. Why do you think this is the case?Do you think agency problems arise in a sole proprietorship or a partnership?What steps would you take to reduce agency problems in a so-called typical corporation?
Business is a sub- system of Society‟. Which of the following option supports this claim? Choose correct answer a. Corporate Social Responsibility. b. Corporate Governance. c. Governing Principles. d. Ethics.
Please do your own work, don't copy from the internet What issue does agency theory examine? Why is it important in a public corporation rather than in a private corporation?
Based on your understanding, why do agency relationship exist within businesses particularly for corporation? What is conflict of interest and how is this related to agency relationship within business firms?
Which of the following is true of limited liability companies ? a) They protect the members personal assets in case of lawsuits b) They are very complex and difficult to run c) They are established for a specific project or for a limited time d) They require members to regularly hold meetings
Which of the following statements relating to corporate governance is FALSE? The legal environment in which a corporation does business can have a big impact on its decisions. Type I agency problems are more important in widely held companies. (Tick here if you think that none of the other statements is FALSE.) Straight voting is better for minority shareholders than cumulative voting. In a civil law system, judges interpret the law but they cannot change it.
Which of the following is a remedy for the Agency Problem in the U.S.? Shareholders have the right to elect the board of directors, which can serve as an effective check if the board remains independent of management. Shareholders have the right to overrule any managerial decisions. The U.S. government directly intervenes in company decisions to ensure shareholder interests are protected. The board of directors should always take management roles in the company.
The Agency Problem arises because of the separation of ownership from control of publiclylisted corporate organizations.I. Discuss this statement bringing out what the Agency Problem is and managementactions or behaviours that may be considered as giving rise to the Agency Problem.II. Explain five ways in which you believe could be used to minimize the occurrence ofthe Agency Problem in a Ghanaian listed company of your choice.
a) The Agency Problem arises because of the separation of ownership from control of publicly listed corporate organizations.I. Discuss this statement bringing out what the Agency Problem is and management actions or behaviours that may be considered as giving rise to the Agency Problem.II. Explain five ways in which you believe could be used to minimize the occurrence of the Agency Problem in a Ghanaian listed company of your choice
One of the objectives of a system of corporate governance is to secure the effective, sound andefficient operation of companies. This objective transcends any legislation or voluntary code.Good corporate governance embraces not only making the company prosper but also doingbusiness in a legal and ethical manner. A key element of corporate governance is the auditcommittee. The Audit Committee is a committee of the board of directors and is of a voluntarynature regulated by voluntary codes. Discuss the problems associated with initiatives that been put forward to ensure independenceof members of audit committee.
Agency problems may cause various corporate scandals. Explain why an agency problem exists in corporations and two (2) potential solutions to agency problems. Relevant examples or illustrations should be given.
A governmental agency can best be described by which of the following statements? A. has a primary purpose of making a profit B. has a primary purpose of using taxpayer funds to provide services C. produces goods for sale to the public D. has regular shareholder meetings