ABSTRACT
This chapter explores the possible connections between Behavioural Accounting Research and agency theory. To begin, we describe agency theory and its origins. Given our focus on behavioural accounting, we concentrate on how the individual is influenced by accounting processes and reports, rather than on how accounting leads to outcomes based on the aggregate behaviour of market participants. In our view, Behavioural Accounting Research is linked to agency theory by explaining the role compensation, information, contracts and monitoring play in agency theory. A sample of research is used to illustrate how behavioural accounting researchers have employed agency theory in their papers. Finally, possible research directions are discussed.
