Use the opportunistic perspective of PAT to explain the potential for managers to manipulate corporate disclosure.
ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by providing
a bonus of 3 per cent 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 maximise the value of its firm.
Underperformance might lead to dismissal and, if the labour market is efficient in disseminating data, a 'failed'
manager might have difficulty attracting a position with comparable pay elsewhere." (Deegan, 2020)
Question: Use the opportunistic perspective of PAT to explain the potential for managers to manipulate
corporate disclosure.
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