Beruflich Dokumente
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Ferrer, Rodiel C., Ferrer, Glenda J., Academy of Accounting and Financial
Studies Journal
INTRODUCTION
This paper evaluates how the liquidity and leverage ratios exert significant e
ffect on the degree of compliance with International Financial Reporting St
andard disclosure as measured by Balance Sheet and Income Statement of
Publicly Listed Corporations.
CONCEPTUAL FRAMEWORK
Agency theory portrays the relationship of principal and agent. In agency re
lationship, principals (shareholders) hire agents (managers) to manage busi
ness operations and entrust to them the decision-
making authority. In corporations, a central problem exists concerning shar
eholders' interest: top management does not always act in the best interest
of shareholders. As a result, tension takes place between two parties since
managers first serve their interest: either in the manner of shirking, which i
s lack of attention for maximizing shareholders returns in the corporate gov
ernance context, or self opportunistic behavior, by accruing wealth meant f
or themselves instead for shareholders.
Information asymmetry occurs when managers have easy and better access
to information against shareholders (Lee and Choi, 2002).
https://www.questia.com/read/1G1-330004820/liquiditiy-and-financial-leverage-ratios-their-impact