An agency problem can occur when

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All of the statements listed in the answer options can contribute to an agency problem. When the desires and objectives of the owners and agents are not aligned, the agent may prioritize their own interests over those of the organization. It can be difficult for owners to verify what the agent is actually doing, which can provide opportunities for agents to act in their own best interests rather than those of the organization. If the owners and agents have different attitudes toward risk, the agent may take excessive risks or avoid taking risks that could benefit the organization. Executives may also be reluctant to pursue risky strategies if they fear it may put their jobs at risk. These factors can all create agency problems that can compromise the effectiveness and integrity of the organization.

An Agency Problem Can Occur When