Positive Accounting Theory (PAT) assumes that principals are aware that agents will act opportunistically, so principals use price protection. This means that:

a.

principles pay lower salaries to compensate the opportunistic approach of the agents

b.

a carefully worded contract is assumed by PAT to remove the potential for the agent to overstate profits.

c.

agents will not be permitted to negotiate elements of organisational contracts

d.

principles charge customers to compensate the loss caused due to opportunistic behaviour