Český finanční a účetní časopis 2014(2):52-68 | DOI: 10.18267/j.cfuc.394

The Principal-Agent Theory and its Influence on the Quality of Assurance Services

Michal Bobek
Ing. Michal, Bobek, MBA. - doktorand; Katedra financí a oceňování podniku, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <xbobm04@vse.cz>.

The article deals with the principal-agent theory and its application on provision of the assurance services. It describes influence which the principal-agent theory might have on the quality of information provided by the assurance services. The article defines stakeholders and shareholders of a company and their role in relation to provision of the assurance services, and then briefly presents the principal-agent theory. The influence of the principal-agent theory on the assurance services is ultimately studied in two ways, based on whether the subject who ordered the service is the main user of the provided information, or not. The agency costs are analyzed taking into account the amount of materiality and the amount of differences which are mentioned in management letter.

Keywords: Principal-Agent Theory; Assurance Services; Audit; Materiality.
JEL classification: G02, M41

Published: June 1, 2014  Show citation

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Bobek, M. (2014). The Principal-Agent Theory and its Influence on the Quality of Assurance Services. Czech Financial and Accounting Journal, 2014(2), 52-68. doi: 10.18267/j.cfuc.394
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