Accounting and Trust Q How could accounting help to develop trust? n Translate all business activities into numeric so it could be summarized. measured and evaluated n Managers may report and discharge their accountability; Principal-agent problem Since all common investors are principals; D Free-rider issues are pervasive n How to assure managers to provide financial report truthfully and reliably? Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 55 Accounting and Trust ⧫ How could accounting help to develop trust?  Translate all business activities into numeric so it could be summarized, measured and evaluated;  Managers may report and discharge their accountability; →Principal-agent problem; ⧫ Since all common investors are principals;  Free-rider issues are pervasive;  How to assure managers to provide financial report truthfully and reliably?