Lunar International College
Masters Of Business Administration
Business Ethics, Corporate Social
Responsibility, and
Governance
TITLE:-AGENCY THEORY
PREPARED BY:- TAZEBACHEW BIRKU MBA-0073/14
march 2023 G.C
Addis Ababa, Ethiopia

AGENCY THEORY
Definition
The main purpose is that maximizes shareholder value and minimizing risk.
Financial reporting
The quality of financial reporting can have a significant impact on a company's
ability to attract capital, and long-term success.

Corporate Governance And Its Impact On
Financial Reporting
Independence Board:
ensuring that the financial statements are accurate and reliable.
Effective board
Ensuring accurate financial reporting:
investors and stakeholders rely on financial reports to make informed decisions.
Managing risk:
a positive impact on financial reporting.
Effective risk management
prevent financial losses and ensure that the company's financial statements
accurately reflect its financial position.
Maintaining ethical standards:
promote ethical behavior and prevent conflicts of interest.
unethical , fraud/trade off and other forms of financial misconduct.

CORPORATE GOVERNANCE AND ITS
IMPACT ON FINANCIAL REPORTING
Investor relations:
providing timely and accurate information to investors and stakeholders,
Effective investor relations build trust and confidence in the company.
Employee morale:
employees feel the company is committed to ethics they are engaged and motivated.
a positive impact on performance
Compliance with regulations:
ensure that companies comply (run) with relevant laws
and regulations.
provide a true and fair view of the company's financial
position.

CORPORATE GOVERNANCE AND ITS
IMPACT ON FINANCIAL REPORTING
Internal controls:
establish and maintain effective internal controls to ensure that financial reporting is
accurate and reliable.
This includes processes for
 ensuring that financial information is accurate and complete,
 identifying and mitigating financial reporting risks, and
 ensuring that financial reporting is compliant with legal and regulatory requirements.
Auditor independence:
ensure that they are independent and objective.
Thus, practices play a critical role in ensuring accurate and reliable financial reporting.
Promoting transparency:
build trust among stakeholders.
disclosing relevant financial information in a timely and accurate manner, and
providing clear explanations of financial results and accounting policies.