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n relation to political relationships, the following is true, except: Political cost hypothesis: Managers of larger entities are more likely to prefer accounting policies that
n relation to political relationships, the following is true, except:" Political cost hypothesis: Managers of larger entities are more likely to prefer accounting policies that reduce profit. "Lobby groups often target larger, more profitable firms." Political costs refer to wealth transfers imposed on an entity e.g. the government may impose a new tax on businesses in a particular industry. Political cost hypothesis: Managers of larger entities are more likely to prefer accounting policies that increase profit
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