Briefly describe the assumptions of traditional agency theory

Question 1 Research in Financial Reporting (total 50 marks) It has been said that “agency theoretical literature in accounting has frequently stressed possible difficulties in pursuing stewardship and valuation usefulness simultaneously” (Kuhner & Pelger 2015, p. 397). When answering the following questions you are expected to use appropriate in-text references. Four (4) marks will be allocated based on the appropriateness of your in-text references a. Briefly describe the assumptions of traditional agency theory. (6 marks) b. Explain how traditional agency theory has influenced two aspects of accounting (do not provide an explanation about linking performance measurement and compensation; choose two other aspects of accounting that traditional agency theory has influenced). (6 marks) c. What influences have the assumptions of traditional agency theory had on approaches to the compensation? (6 marks) d. Outline two criticisms of traditional agency theory. (6 marks) e. Discuss one alternative theory to agency theory and explain the deficiencies in agency theory that the alternative theory attempts to overcome. (6 marks) f. How does a stewardship focus influence the measuring and reporting of financial accounting