In 2013, it was revealed that the Internal Revenue Service (IRS) was inappropriately targeting political groups applying for tax-exempt status.Prior to this revelation, the House Ways and Means Committee had been investigating allegations of political discrimination by the IRS against various political groups.This investigation by the House Ways and Means Committee is an example of which type of control to address the principal-agent problem?

Question

Quizplus · Accepted Answer

The investigation by the House Ways and Means Committee is an example of an after-the-fact control mechanism because it occurred after the IRS had already engaged in inappropriate targeting of political groups. After-the-fact controls are designed to detect and correct problems or deviations from expectations after they have occurred, which is precisely what the investigation aimed to do.

In 2013, It Was Revealed That the Internal Revenue Service