Answered: A According to shankman(1999), two…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 3CYBK: Which of the following are affected by the quality of an organization’s internal controls? a....

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A According to shankman(1999), two features make agency relations special. One of this is inherent conflict of interest between shareholders and managers. What is the other?

a- limited communication between owners and managers

b- large difference in defined rights and obligations

c- informational asymmetry between principal and agents

d- short term focus of the ownership goals

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