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(a) (b) (C) (d) (e) In the situation where a contractual arrangement has been negotiated that provides managers with a bonus based on the prots
(a) (b) (C) (d) (e) In the situation where a contractual arrangement has been negotiated that provides managers with a bonus based on the prots generated by the entity: The efficiency perspective identies this as a way of minimising agency costs by aligning the interests of the principal and the agent. The efficiency perspective identies this as a way of minimising agency costs by aligning the interests of the principal and the agent and the opportunistic perspective predicts that managers will seek to adopt accounting methods that best reect the performance of the organisation. The opportunistic perspective predicts that managers will seek to adopt accounting methods that best reect the performance of the organisation. The underlying premise of Positive Accounting Theory is that agents (managers) aim to act in the best interests of the organisation, so the bonus is recognition of those efforts. None of the above
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