ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by providing a bonus of 3 percent of reported profits. This is an Accounting-based incentive that has the advantage which the accounting results may be based on subunit or divisional performance. "A well-informed labour market will motivate management to work to maximize the value of its firm. Underperformance might lead to dismissal and, if the labor market is efficient in disseminating data, a 'failed' the manager might have difficulty attracting a position with comparable pay elsewhere." (Deegan, 2020) Requirement: 1) Using Positive Accounting Theory (PAT), discuss the bonus theme in general and why the bonus plan (Accounting-based) was put in place in ABC Ltd? Please provide references for my study. Thing to include in answer: Demonstrate superior knowledge of the theory and key concepts. Excellent interpretation with extensive elaboration of relevant subtopics, appropriately weighted and within the prescribed word count. Demonstrated in-depth understanding and application of key concepts and terminology relating to the accounting fundamentals
ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by providing
a bonus of 3 percent of reported profits. This is an Accounting-based incentive that has the advantage which
the accounting results may be based on subunit or divisional performance.
"A well-informed labour market will motivate management to work to maximize the value of its firm.
Underperformance might lead to dismissal and, if the labor
the manager might have difficulty attracting a position with comparable pay elsewhere." (Deegan, 2020)
Requirement:
1) Using Positive Accounting Theory (PAT), discuss the bonus theme in general and why the bonus plan
(Accounting-based) was put in place in ABC Ltd? Please provide references for my study.
Thing to include in answer: Demonstrate superior
knowledge of the theory and
key concepts. Excellent
interpretation with extensive
elaboration of relevant subtopics, appropriately
weighted and within the
prescribed word count.
Demonstrated in-depth
understanding and
application of key concepts
and terminology relating to
the accounting
fundamentals
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