Documente Academic
Documente Profesional
Documente Cultură
money, capital rights, credit & funds of any kind, Financial Manager’s Responsibilities
which are employed in the operation of an
enterprise. 1. Forecasting and Planning
1
(2)Agency Costs:
Costs borne by stockholders to prevent or minimize
agency problem. Agency cost is of four types:
(iii) Opportunity costs: Result from the difficulties
(i) Monitoring Expenses
These outlays pay for audits & control procedures that
that large organizations typically have in responding
are used to asses and limit the managerial behavior to to new opportunities. The firms necessary
those actions tends to be in the best interest of the organizational structure, decision hierarchy, and
owners. control mechanisms may cause profitable
(ii)Bonding Expenses opportunities to be forgone because of
- Protect against the potential consequences of managements inability to seize up on them quickly.
dishonest acts by managers. Typically, the owners pay a (iv) Structuring Expenses are the most popular,
third party bonding company to obtain a fidelity Bond. powerful, & expensive agency costs incurred by
firms.
- This bond (fidelity) is a contract under which the - Managerial compensation
bonding company agrees to reimburse the firm for up to
a stated amount if a bonded managers dishonest act
results in financial loss to the firm.