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Agency problem and Sarbanes-Oxley Act

How does the agency problem affect accountants? How has SOX changed the situation?

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Agency problem refers to the conflict of interest that might occur between shareholders, creditors, and the management of the company. This conflict of interest can pose a serious concern to accounting because there is a likelyhood that financial information could be manipulated so as to attract more investors. For instance, the shareholders might demand that management report favourable information about the company so that more ...

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How does the agency problem affect accountants? How has SOX changed the situation?

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