Question 1 (Total marks = 33)
You have recently started working at the Terrific Telephone Company, which
provides mobile telephone services. The aim of your task is to structure
compensation packages so that the packages align the motivations of
executives (called goal congruency) with the desire of the company to
maximise the return to shareholders. Currently all employees are on fixed
salaries.
The industry is very competitive and the CEO would like you to answer the
following questions. Prepare separate answers for each question:
a. Explain why salaries may fail to motivate employees to work
productively (as suggested by agency theory).
(6 marks)
b. Identify possible different components of compensation packages and
explain how different components may motivate employees to work
productively in the short and/or long term.
(8 marks)
c. Discuss how an employee’s attitude to risk might influence their desired
compensation package.
(5 marks)
d. Identify and discuss three factors that may limit the effectiveness of
performance based compensation packages in motivating employees to
work productively.
(9 marks)
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e. Identify and discuss the benefits of using an executive compensation committee in the determination of the components to include in compensation packages.
(5 marks)
Question 2 (Total marks = 8)
a. How does agency theory explain the need for the preparation of accounts?
(4 marks)
b. How does agency theory explain the need for an audit of accounts?
(4 marks)
Question 3 (Total marks = 10)
Van Puyvelde et al. (2012) suggest that agency theory alone is not enough when studying governance in non-profit organisations.
a. Explain what is meant by the term governance (as it applies to organisations).
(2 marks)
b. Explain why using agency theory as a single theory is not appropriate to study governance in non-profit organisations?
(4 marks)
c. Briefly explain an alternate or supplementary theory that might be used more appropriately when studying governance in non-profit organisations.
(4 marks)
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Question 4 (Total marks = 43)
The following questions relate to the articles by (Masoud 2017) and Salifu and Mahama (2015), which examined the audit expectation gap issue.
a) Identify and explain the type of mixed method study that was used by Masoud (2017).
(3 marks)
b) Review the qualitative portion of Masoud’s (2017) study. For each component listed below under (i) to (iv):
Provide a brief summary of what he has done, and
Evaluate the appropriateness of what he has done (i.e., was it satisfactory or could he have done something different to improve the rigour of his qualitative study?):
i. How were participants selected and was it an appropriate method?
(3 marks)
ii. Were the number of participants interviewed appropriate? If so, why do you believe this is an appropriate number, and if not, how many interviewees would have improved the rigour?
(3 marks)
iii. How were the qualitative data analysed and was this analysis appropriate? If so, why do you believe this analysis is appropriate, and if not, what alternative anlaysis would have improved the rigour?
(3 marks)
iv. What is your opinion about how the qualitative data analysis was written up?
(3 marks)
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c) To what extent do you think Masoud (2017) has been successful in drawing on the first phase of his study to carry out the second phase of his mixed-methods study?
(4 marks)
d) Explain how Masuod (2017 ) and Salifu and Mahama (2015) go about designing the questionnaires for their studies. Compare the two studies and choose which study uses a more rigorous approach to questionnaire design, stating your reasons why you believe one approach is superior in its rigour.
(8 marks)
e) Explain how Masuod (2017 ) and Salifu and Mahama (2015) go about writing up the findings from their questionnaires. Compare the two studies and choose which study uses a more rigorous approach, stating reasons why you believe one approach is superior in its rigour.
(8 marks)
f) Outline one aspect of Masoud’s (2017) study that has been done poorly (other than the ones already discussed in question 4 b-e above).
(4 marks)
g) Outline one aspect of Salifu and Mahama’s (2015) study that has been done poorly (other than the ones already discussed in question 4 b-e above) .
(4 marks)
Appropriate in-text referencing for each answer and bibliography for assignment (6 marks)
Bibliography of references cited above
Masoud, N 2017, 'An empirical study of audit expectation-performance gap: The case of Libya', Research in International Business and Finance, vol. 41, pp. 1-15.
Salifu, I & Mahama, M 2015, 'The evaluation of evidence of the audit expectation gap in Ghana', Research Journal of Finance and Accounting, vol. 6, no. 24, pp. 20-30.
Van Puyvelde, S, Caers, R, Du Bois, C & Jegers, M 2012, 'The governance of nonprofit organizations: Integrating agency theory with stakeholder and stewardship theories', Nonprofit and Voluntary Sector Quarterly, vol. 41, no. 3, pp. 431-51.