Question

what the relationship between the agency theory and earnings management ?

Answer 1

Solution:

Agency Theory:

The workplace theory is a supposition that clears up the association among principals and masters in business. Office speculation is stressed over settling issues that can exist in office associations due to unaligned goals or unmistakable hatred levels to risk.

The most broadly perceived association relationship in back occurs between speculators (essential) and companions executives (pros).

Earnings management:

Profit the board is the utilization of bookkeeping methods to deliver budgetary reports that present an excessively positive perspective of an organization's business exercises and money related position.

Relationship between the agency theory and earnings management :

In case benefit the board is utilized basically deftly by administrators, firms where association costs are more extraordinary should show a more elevated amount of pay the officials. .

The trial confirmation in our examination exhibits that there is a retrogressive association between association costs and benefit the board.