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The Principal-Agent Theory and its Influence on the Quality of Assurance Services
[Vliv vztahů zastoupení na kvalitu informací poskytovaných ověřovacími službami]

Author

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  • Michal Bobek

Abstract

The article deals with the principal-agent theory and its application on provision of the assurance services. It describes influence which the principal-agent theory might have on the quality of information provided by the assurance services. The article defines stakeholders and shareholders of a company and their role in relation to provision of the assurance services, and then briefly presents the principal-agent theory. The influence of the principal-agent theory on the assurance services is ultimately studied in two ways, based on whether the subject who ordered the service is the main user of the provided information, or not. The agency costs are analyzed taking into account the amount of materiality and the amount of differences which are mentioned in management letter.

Suggested Citation

  • Michal Bobek, 2014. "The Principal-Agent Theory and its Influence on the Quality of Assurance Services [Vliv vztahů zastoupení na kvalitu informací poskytovaných ověřovacími službami]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2014(2), pages 52-68.
    • Handle: RePEc:prg:jnlcfu:v:2014:y:2014:i:2:id:394:p:52-68
    DOI: 10.18267/j.cfuc.394
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    References listed on IDEAS

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    1. Tomáš Buus, 2011. "The Agency Cost from the Point of View of Financial Markets [Náklady zastoupení v koncernu pohledem finančního trhu]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2011(4), pages 52-67.
    2. Donna M. Carlon & Alexis Downs, 2014. "Stakeholder Valuing: A Process for Identifying the Interrelationships between Firm and Stakeholder Attributes," Administrative Sciences, MDPI, vol. 4(2), pages 1-18, May.
    3. Jiří Hlaváček & Michal Hlaváček, 2006. ""Principal - Agent" Problem in the Context of the Economic Survival [Problém "principál - agent" při maximalizaci pravděpodobnosti ekonomického přežití]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2006(3), pages 18-33.
    4. Ross, Stephen A, 1973. "The Economic Theory of Agency: The Principal's Problem," American Economic Review, American Economic Association, vol. 63(2), pages 134-139, May.
    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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    More about this item

    Keywords

    Principal-Agent Theory; Assurance Services; Audit; Materiality; Vztahy zastoupení; Ověřovací služby; Materialita;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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