The major purpose of this article is to analyze the role of the \"Agency Theory\" in implementing effective\r\ncontrol mechanisms. In effect, various control paradigms under the following situations are elaborated:\r\na) When the agent''s control system is merely based on the output under the condition of uncertainty; b)\r\nWhen the control mechanism is based on the output, and information about agent''s action or effort; c)\r\nWhen the agent''s monitoring control is based on the output, agent''s action and additional variables. It\r\nis concluded that agency theory posits different organizational, behavioral, economical and controlling\r\nroles, and it is a potent framework which can be extricated in promulgation of the management control\r\nsystems. Furthermore, the implementation of a control mechanism depends on the amount and\r\ncontents of the public and/ or private information that exist in the domain of the managerial accounting\r\nsystem. The disseminated information and the concurrent variables surrounding the agency relations\r\nare also vital elements in creating any control system. Finally, the optimal control mechanism under\r\neach preceding conditions are revealed.
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