Accounting Theory Essays (Examples)
Study Document
Agency Theory
Introduction
Agency theory is a theory explicating the relationship between the shareholders, who act as the principals, and the managers, who act as the agents. Within this relationship, the … results of the company (Tearney and Dodd, 2009).
As a result, this could give rise to agency problems for the reason that this theory encompasses the costs incurred in solving conflicts between the company principals and agents and ensuring that the interests of these two parties are … in alignment (Ballwieser et al., 2012).
The purpose of this paper is to carry out an independent review of the literature on agency theory as it applies to decision-making in accounting, describing and explaining three important ways in which agency theory might impact decisions made in a company in relation to the recording and presentation of financial information.
Agency theory & Decision-Making in accounting
There are important ways in which agency theory……
References
References
Ballwieser, W., Bamberg, G., Beckmann, M. J., Bester, H., Blickle, M., Ewert, R., ... & Gaynor, M. (2012). Agency theory, information, and incentives. Springer Science & Business Media.
Bou?ková, M. (2015). Management accounting and agency theory. Procedia Economics and Finance, 25, 5-13.
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74.
Healy, P. M. (2005). Financial Reporting Problems at Molex, Inc.(A). Harvard Business School.
Larcker, D. F., & Tayan, B. (2007). Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?. Rock Center for Corporate Governance at Stanford University Case Teaching No. CG-05.
Mitnick, B. M. (2015). Agency theory. Wiley encyclopedia of management, 1-6.
Scott, W. R., & O\\\\\\'Brien, P. C. (2003). Financial accounting theory (Vol. 3). Toronto: Prentice Hall.
Tearney, M. G., & Dodd, J. (2009). Accounting theory. H. I. Wolk (Ed.). New York: Sage.
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Impact Of Agency Theory
Agency theory
Agency theory refers to the relationship with the principle and the agent, where the principle delegates its financial decision making to the agent. In most … the agent and principle both have asymmetric interest, causing any one party to suffer at an extreme case.
To remove the problem, the theory states that the goals of managers and the shareholders should be aligned and certain frameworks and practices should be adopted to overlook the … as this relationship is exploited in self-interest. Some have argued that the scandals and agency risk exist primarily due the awareness of this theory which shouldn’t be thought in the first place. This education encourages an agency mindset where the whole firm sometimes act in corrupt and … creating conflicts on critical decision making of the firm.
Just like most other firms, Wells Fargo’s decision making is impacted due to Agency theory in many……
References
References
Demsetz, R. S. (1997). Agency Problems and Risk Taking at Banks.
Heath, J. (n.d.). Uses and Abuses of Agency Theory. Business Ethics Quarterly.
Kuypers, A. (2011). How is dealt with the agency problem and what is the role of the board of directors in it?
Lumen. (n.d.). Agency and Conflicts of Interests. Lumen. Retrieved from https://courses.lumenlearning.com/boundless-finance/chapter/agency-and-conflicts-of-interest/
Murray, I. (2016, September ). Wells Fargo and the Principle Agent Problem. Competitive Enterprise Institute.
Palia, D. (2007). “Agency Theory in Banking: An Empirical Analysis of Moral Hazard and the Agency Costs of Equity. Banks and Banks System.
Pennsylvania, W. U. (2017, August 08). Wells Fargo: What It Will Take to Clean Up the Mess. Wharton University of Pensylvannia.
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Net Worth Theory And Corporate Fraud
Danske Bank's Money Laundering Scandal
Madinger (2006) points out that the net worth method is among the most common used in accounting forensics when it comes to detecting illegal income, such as by way of money laundering. The case of Danske Bank and its money … a situation in which the net worth method could be applied to investigate this corporate fraud.
As Schwab (1961) states, the net worth theory rests upon the idea that if one’s net increase exceeds the income reported, the corporation has understated its income; additionally, “if there is … the foundation for proceeding into the next stage of investigation (Madinger, 2006).
This phase starts by looking at assets valued at cost without accounting for depreciation or appreciation. With Danske, “the Estonian branch generated 11 per cent of Danske’s total profits before tax that year, despite only … for depreciation or appreciation. With Danske, “the Estonian……
References
References
IRS. (2017). Retrieved from https://www.irs.gov/irm/part9/irm_09-005-009
Madlinger, J. (2006). Money laundering: A guide for criminal investigators. CRC Press.
Milne, R. & Winter, D. (2018). Danske: anatomy of a money laundering scandal. Retrieved from https://www.ft.com/content/519ad6ae-bcd8-11e8-94b2-17176fbf93f5
Schwab, R. D. (1961). The Civil Aspects of the Net Worth Method. Wm. & Mary L. Rev., 3, 65.
Study Document
The Cost Effectiveness In Cloud Computing Within An Accounting Organization
The Cost Effectiveness of Cloud Computing within an accounting Organization
Table of Contents
1 Introduction 4
1.1 Background 4
1.2 Significance of the Topic 4
1.3 Research Problem 5
1.4 Research Questions …
3.3 Proposed Interview Questions 13
3.4 Sample Population 13
3.5 Ethical Considerations 14
3.6 Data Analysis Plan & Rationale 15
4 Contributions to theory or Practice and their Significance 16
5 Ethical Issues and Methods to Address 17
6 Conclusion 17
Introduction
Background
Corporations of all sizes … and their Significance 16
5 Ethical Issues and Methods to Address 17
6 Conclusion 17
Introduction
Background
Corporations of all sizes in the accounting industry, in addition to other industries such as retail, information technology, insurance, and media industries, capitalize on public cloud services. The steadily advancing … public cloud services. The steadily advancing features of the cloud, including infinite and unrestricted storage and powerful analytic tools, system infrastructure……
References
References
Bauer, E., & Adams, R. (2015). Reliability and availability of cloud computing. Hoboken: John Wiley & Sons.
Chang, W. Y., Abu-Amara, H., & Sanford, J. F. (2018). Transforming enterprise cloud services. New York: Springer Science & Business Media.
Chang, V. (Ed.). (2015). Delivery and adoption of cloud computing Services in Contemporary Organizations. IGI Global.
Hsien, W. F., Yang, C. C., & Hwang, M. S. (2016). A Survey of Public Auditing for Secure Data Storage in Cloud Computing. IJ Network Security, 18(1), 133-142.
Jamsa, K. (2016). Cloud computing. New York: Jones & Bartlett Publishers.
Maguire, M., & Delahunt, B. (2017). Doing a thematic analysis: A practical, step-by-step guide for learning and teaching scholars. AISHE-J: The All Ireland Journal of Teaching and Learning in Higher Education, 9(3).
Mehmood, R., Katib, S. S. I., & Chlamtac, I. (2020). Smart Infrastructure and Applications. New York: Springer International Publishing.
Prabhu, C. S. R. (2015). E-governance: concepts and case studies. New Delhi: PHI Learning Pvt. Ltd.
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Shareholder Vs Stakeholder Theory
Introduction
Milton Friedman’s quote gets to the heart of the conflict between shareholder theory vs. stakeholder theory. Shareholder theory posits that a corporation’s sole responsibility is to maximize the return on investment (ROI) for shareholders. Stakeholder theory posits, on the other hand, that a company owes a duty to all stakeholders (not just shareholders)—members of the community, workers, consumers; in … the four major sources of ethical values in business: Law, Culture, Philosophy, and Religion. It will show that in today’s business environment, stakeholder theory needs to be pursued instead of shareholder theory, and it will explain why starting with Friedman’s own words.
Without Deception or Fraud
Friedman believed that if a corporation is doing right … rest will take care of itself. The problem is that times have changed since Friedman made that statement. When Friedman argued for shareholder theory, corporate share buybacks were still illegal. It was not……
References
References
Augustine. (n.d.). Commentaries on Sermon on the Mount. http://www.newadvent.org/fathers/16011.htm
Chen, J. (2019). Market Milestones as the Bull Market Turns 10. Retrieved from https://www.investopedia.com/market-milestones-as-the-bull-market-turns-10-4588903
Egan, M. (2018). Tax cut triggers $437 billion explosion of stock buybacks. Retrieved from https://money.cnn.com/2018/07/10/investing/stock-buybacks-record-tax-cuts/index.html
Henrich, S. (2019). Unholy alliance. Retrieved from https://northmantrader.com/2019/11/30/unholy-alliance/
Laux, C., & Leuz, C. (2010). Did fair-value accounting contribute to the financial crisis?. Journal of economic perspectives, 24(1), 93-118.
Light, L. (2019). More than Half of All Stock Buybacks are Now Financed by Debt. Here’s Why That’s a Problem. Retrieved from https://fortune.com/2019/08/20/stock-buybacks-debt-financed/
Mullen, C. (2019). People want to buy \\\\\\'local\\\\\\' food, but they\\\\\\'re not sure what it means. Retrieved from https://www.bizjournals.com/bizwomen/news/latest-news/2019/05/people-want-to-buy-local-food-but-theyre-not-sure.html?page=all
Putka, G. (2019). Insiders are selling. Retrieved from https://www.washingtonpost.com/business/economy/company-insiders-are-selling-stock-during-buyback-programs-and-making-additional-profits-when-stock-prices-jump-and-its-legal/2019/11/06/fc592f58-e493-11e9-a331-2df12d56a80b_story.html
Study Document
Capital Structure Analysis
… 61% and 89%, respectively).
Optimal Capital Structure Theories
There are four capital structure theories that have been developed to date: 1) the trade-off theory, 2) the pecking order theory, 3) the signaling theory, and 4) the managerial opportunism theory (Graham & Leary, ) Each theory describes a firm’s optimal capital structure as discussed below.
Trade-off theory
This theory suggests that managers should choose a mix of debt and equity that achieves a balance between the tax advantages of the debt and … different from that of the lenders. Lenders are interested in getting their money back while shareholders are interested in maximizing their wealth. This theory states that if a firm has a greater agency problems, they should avoid using debt at all costs.
Debt is also associated with … a firm is about its future financing requirements and projects, the less debt the firm will use for financing……
References
References
Estimating a synthetic rating and cost of debt. (n.d.). Retrieved from http://pages.stern.nyu.edu/~adamodar/New_Home_Page/valquestions/syntrating.htm
Fenebris.com. (2019, August 18). AU. Retrieved from http://www.market-risk-premia.com/au.htmlm
Intelligent Investor. (n.d.). FlexiGroup Limited. Retrieved from https://www.intelligentinvestor.com.au/shares/asx-fxl/flexigroup-limited/financials IntelligentInvestor.com. (n.d.). Afterpay Touch Group Limited. Retrieved from https://www.intelligentinvestor.com.au/shares/asx-apt/afterpay-touch-group-limited/financials
Yahoo Finance. (n.d.). FLEXIGROUP FPO (FXL.AX) Balance Sheet. Retrieved from https://finance.yahoo.com/quote/FXL.AX/balance-sheet?p=FXL.AXhttps://finance.yahoo.com/quote/FXL.AX/balance-sheet?p=FXL.AX
Study Document
How Interest Rates Compare Over The Last Decade Within The United
...Accounting theory Interest rates form the basis for valuation models around the world. They are used in almost every industry, country, and geography. Interest rates can also influence corporate and consumer behaviors. For example, depending on the inherent risk of a consumer, credit card rates determine how much an individual must pay on a month basis to the financial institution. Corporations looking to borrow funds to expand their market share must consider the variable interest rates being changed and their ability to service the debt. Even governments must be mindful of the extent of their borrowers and the corresponding impact of interest rates on their ability to services the debt. Due primarily to their importance in key elements of human civilization, interest rates are a closely watched tool by individual investors, general consumers, and corporations. Banks in particular are heavily influenced by the change in interest rates as they operate as financial……
References
References
1. Goodhard, C and E Perotti, 2008 “Maturity mismatch stretching: Banking has taken a wrong turn”, CEPR Policy Insight 81, 6-July
2. Holston, Laubach, and Williams. 2017. “Measuring the Natural Rate of Interest: International Trends and Determinants,” Journal of International Economics 108, supplement 1 (May): S39–S75
3. Laubach and Williams. 2003. “Measuring the Natural Rate of Interest,” Review of Economics and Statistics 85, no.4 (November): 1063-70.
4. Rachel, L. and Smith, T.D., 2017. Are low real interest rates here to stay?. International Journal of Central Banking, 13(3), pp.1-42.
5. Schularick, M, and A M Taylor, (2009), “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008”, NBER DP 15512
6. Stock, J.H. and Watson, M.W., 2007. Why has US inflation become harder to forecast?. Journal of Money, Credit and banking, 39, pp.3-33
Study Document
Challenges In Management Facing Transformational Leaders Service
Annotated bibliography: Management and accounting Challenges facing Transformational Leaders: Service and Technology
Carreiro, H., & Oliveira, T. (2019). Impact of transformational leadership on the diffusion of innovation in ……
References
References
Al Ahmad, S., Easa, N. F., & Mostapha, N. (2019). The Effect of Transformational Leadership on Innovation: Evidence from Lebanese Banks. European Research Studies Journal, 22(4), 215-240.
Aldholay, A. H., Isaac, O., Abdullah, Z., & Ramayah, T. (2018). The role of transformational leadership as a mediating variable in DeLone and McLean information system success model: The context of online learning usage in Yemen. Telematics and Informatics, 35(5), 1421-1437.
Carreiro, H., & Oliveira, T. (2019). Impact of transformational leadership on the diffusion of innovation in firms: Application to mobile cloud computing. Computers in Industry, 107, 104-113.
Zappalà, S., & Toscano, F. (2019). Transformational leadership and innovation adoption: Is there a moderation role of personal initiative and job control?. Psychologica, 119.
Zhang, Y., Zheng, J., & Darko, A. (2018). How does transformational leadership promote innovation in construction? The mediating role of innovation climate and the multilevel moderation role of project requirements. Sustainability, 10(5), 1506.
Study Document
Advantages And Disadvantages Of Interrelationships Between Organizational
…
Organizational Functions
The functions of an organization take into account the different aspects undertaken by the business including production or manufacturing, marketing, sales, accounting as well as research and development. In accordance to Sherman and Thompson (2019), the organizational structure delineates the relationship and interrelations between the … is, if an organization has dissimilar lines of production, the department for every line of production has its own functional groups, for instance, accounting, research and development, and marketing (Jones, 2013). The advantage of this is that every division of the organization has the staff to undertake … adversely impacted by plenty of redundancy or inefficiency. A fitting instance is the aspect of having to manage six different human resources or accounting operations, instead of a single, centralized operation. This implies that there is repetition of functions, systems of management, development of policies and others ……
References
References
Air India. (2019). Board of Directors. Retrieved from: http://www.airindia.in/board-of-directors.htm
Aquinas, P. G. (2008). Organization structure and design. India: Excel Books India.
Burns, T., & Stalker, G. M. (2005). Mechanistic and organic systems. Organizational Behavior, 2, 214-25.
Choo, S., & Bowley, C. (2007). Emerald Article: Using training and development to affect job satisfaction. Journal of Small Business and Enterprise Development, 14(2),339 - 352.
Cichocki, P., & Irwin, C. (2014). Organization design: A guide to building effective organizations. Kogan Page Publishers.
Civil Aviation. (2019). About Us: Organizational Setup. Retrieved from: http://www.civilaviation.gov.in/en/aboutus/orgsetup
Cunliffe, A. L. (2008). Organization theory. New York: Sage.
Cunliffe, A. L., & Luhman, J. T. (2012). Key concepts in organization theory. New York: Sage.
Study Document
Elon Musk And Power At Tesla
… variety of reasons.
As Yang and Zhao (2014) point out, “the main argument against CEO duality (or dual leadership) is based on agency theory, which predicts that CEOs, as agents of shareholders, do not always act in the best interests of shareholders” (p. 1). This can be … soared, making shareholders happy and rich. However, when sell side analysts began to criticize Musk’s actions and pick apart the company’s revenues and accounting, short interest increased and the stock was hammered back down. In order to provide more incentive among shareholders to increase their purchases of … There should be more disclosure, not less. Yet, even with the roles having been split up since 2018, Tesla continues to practice questionable accounting methods that leave analysts and hedge fund managers baffled by what appear to be nothing more than accounting tricks to help keep the stock price up for one more……
References
References
Abels, P. B., & Martelli, J. T. (2013). CEO duality: how many hats are too many?. Corporate Governance: The international journal of business in society, 13(2), 135-147.
Dickins, D. (2010). CEO and COB duality: Does it matter. Internal Auditing, 25(4), 35-38.
Gaydos, R. (2018). Elon Musk may have violated Tesla’s conduct and ethics code after smoking up in podcast interview: report. Retrieved from https://www.foxnews.com/tech/elon-musk-may-have-violated-teslas-conduct-and-ethics-code-after-smoking-up-in-podcast-interview-report
Porter, J. (2018). Tesla has found a new chairperson to replace Elon Musk. Retrieved from https://www.theverge.com/2018/11/8/18074800/tesla-new-chair-2018-robyn-denholm-elon-musk
Yang, T., & Zhao, S. (2014). CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment. Journal of Banking & Finance, 49, 534-552.
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