1 - Accounting and agency theory Flashcards
Fact or opinion?
My name is Bond, James Bond.
Yes, fact because it can be tested easily to see if it is true or false.
Fact or opinion?
You are so pretty.
No, opinion even if everyone agrees.
Fact or opinion?
You are the prettiest girl I have ever seen.
No, still opinion.
Fact or opinion?
I said she was pretty.
This, however, is a fact as I either did or did not say it.
Fact or opinion?
I have an appointment with Dr Vall tomorrow.
Fact because testable by reference to his appointment book.
Fact or opinion?
I will see Dr Vall tomorrow.
Opinion because of future tense.
Fact or opinion?
The sun ain’t gonna shine anymore.
Opinion because future but the probability of it becoming true is almost zero, so for practical purposes, it can be regarded as a false factual statement, but strictly speaking it is still an opinion.
Fact or opinion?
To be or not to be: that is the question.
Opinion only.
Fact or opinion?
To be or not to be: that is a question.
Fact, even though we missed out the question mark.
Fact or opinion?
Eating people is wrong.
An opinion even though it is held by all sane people, I assume.
Accounting exists because people cannot be … with other people’s property.
Accounting exists because people cannot be trusted with other people’s property.
Agency theory assumes human nature is …
Agency theory assumes human nature is selfish.
The type of cost that is most effective in dealing with the agency problem is the …
The type of cost that is most effective in dealing with the agency problem is the bonding cost.
A new theory not yet proven is often called a …
A new theory not yet proven is often called a hypothesis.
The individual components of a theory are called … or …
The individual components of a theory are called postulates or hypotheses.
