A problem in determining managerial accountability that arises when delegating authority to managers is known as an agency problem.

Question

Quizplus · Accepted Answer

This statement is true. An agency problem occurs when a principal (such as a company owner or board of directors) delegates authority to a manager but cannot fully monitor or control the manager's actions. This can create conflicts of interest or incentives for the manager to act in their own self-interest rather than in the best interest of the company.

A Problem in Determining Managerial Accountability That Arises When Delegating