Question 1 (Total marks 33)
a. Explain what agency theory suggests regarding how to structure executive compensation. (6 marks)
b. Review the study by Yusuf et al. (2018). What arguments do the authors provide to suggest that agency theory is not applicable for determining executive compensation in developing countries?
c. Using the Hofstede Insights website: https://www.hofstedeinsights.com/product/compare-countries/ compare the cultural scores for Australia and Pakistan.
Explain what the differences in the scores between Australia and Pakistan indicate, regarding:
i. uncertainty avoidance and ii. long-term orientation
d. How might your discussion in c. above be used to further explain why agency theory may not be useful to guide in the determination of executive compensation in Pakistan (build on what you have written in c., do not use the arguments of Yusuf et al. (2018) in answering this question)?
e. Review the study by Yusuf et al. (2018). Why is a qualitative approach appropriate for their research objectives?
Question 2 (Total marks 30)
Studies by Chong and Mahama (2014) and Matsuo and Matsuo (2017) both consider the interactive use of budgets and team performance.
a. Define interactive budgeting and explain its suggested advantages.
(6 marks) b. What are the similarities in the proposed models for each of the studies?
c. How is interactive budgeting measured in each of the studies?
(6 marks) d. While each study considers team performance in a slightly different way, to what extent do you think it is reasonable to compare the findings of these two studies?
(6 marks) e. Discuss whether one of the studies appears to demonstrate more favourable findings regarding the benefits of interactive budgeting?
Question 3 (Total marks 32)
Two recent studies have addressed the audit expectation gap (Akther et al. 2019; Kumari et al. 2019).
a. Why is the audit expectation gap?
b. Why is the audit expectation gap of such interest to researchers?
(5 marks) c. How are the two studies (Akther et al. 2019; Kumari et al. 2019) similar and different in their research objectives?
(6 marks) d. Critically evaluate the study by Akther et al. (2019), what shortcomings do you notice in their research methods?
(5 marks) e. Critically evaluate the study by Kumari et al. (2019) what shortcomings do you notice in their research methods?
(5 marks) f. Explain your reasoning to show which one of the two studies is superior in their research methods.
Appropriate use of in text referencing and a reference list that follows Harvard referencing.
Akther, T, Fengju, X & Haque, MZ 2019, ‘An investigation of audit expectation gap in Bangladesh’, Journal of Business, vol. 4, no. 2, pp. 0111.
Chong, KM & Mahama, H 2014, ‘The impact of interactive and diagnostic uses of budgets on team effectiveness’, Management Accounting Research, vol. 25, no. 3, pp. 206-22.
Kumari, J, Ajward, R & Dissabandara, D 2019, ‘Investors’ perception and audit expectation performance gap (AEG) in the context of listed firms in Sri Lanka’, CA Journal of Applied Research, vol. 3, pp. 1-27.
Matsuo, M & Matsuo, T 2017, ‘The effect of diagnostic and interactive uses of management control systems and managerial coaching on reflection in teams’, Journal of Accounting & Organizational Change, vol. 13, no. 3, pp. 410-24.
Yusuf, F, Yousaf, A & Saeed, A 2018, ‘Rethinking agency theory in developing countries: A case study of Pakistan’, Accounting Forum, vol.
42, no. 4, pp. 281-92.
The above references can be found in the Reading List.
Question 1 (Total marks 33)