The Agency Theory And Its Impact On The Application Of Accounting In Industrial Companies

Abstract

Therefore, this study aims to review the origins of accounting and its development through different eras, as well as to examine agency theory and its mathematical interpretation due to its effective role in reducing the intensity of conflicts among the various parties dealing with the institution. The study concludes with the extraction of results and the presentation of important recommendations. Using the five critical qualitative characteristics identified by the International Accounting Standards Board, this study explores how agency theory affects the application of accounting in Jordanian industrial companies. The study delves into the ways in which the structural features of agency theory including accounting applications in Jordanian industrial companies, and enhancement techniques impact the reliability and use of agency theory in accounting practices within these companies, based on agency theory. Fifty accounting experts from various Jordanian industrial companies were surveyed using a mixed approach that included descriptive statistics and regression analysis. The results show that CAS is positively and statistically related to most aspects of financial reporting quality, especially understandability and relevance. However, CAS was not a good predictor of verifiability.