ACC 333 EXAM 1 COMPLETE REVIEW STUDY GUIDE 2024

ACC 333 EXAM 1 COMPLETE REVIEW STUDY GUIDE 2024 principle-agent relationship - ANS-when an owner or someone responsible for an asset (principal) delegates the control of said asset to another party who has a greater knowledge base principal-agent problem - ANS-a problem caused by an agent pursuing his own interests rather than the interests of the principal who hired him agency costs - ANS-the sum of incentive costs, monitoring costs, enforcement costs, and individual financial losses incurred by principals to reduce agency problems information asymmetry - ANS-situation in which one party (agent) is more informed than another (principal) because of the possession of private information REMM - ANS-resourceful, evaluative, maximizing model behavior = evaluative, unlimited wants, maximizers, and resourceful economic (money maximizer) model - ANS-choices based on what maximizes monetary wealth *poor description of human behavior sociological (social victim) model - ANS-choices determined by social norms in environment *do people respond to incentives by rewards and punishments? psychological (hierarchy of needs) model - ANS-choices based on satisfying absolute, independent wants in rank order political (perfect agent) model - ANS...