Agency theory is one of the most essential improvements in microeconomics over the past 20 years. It applies to accounting, mechanical association and financial matters of work, and has become the premise of the monetary model of compensation. The organization considers the motivating forces, risks and choice of representatives. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essayThe first to create agency theory were authors Ross and Barry Mitnick. Ross is responsible for the origin of agency theory while Barry is responsible for institutional agency theory, although the fundamental principles of both of them have the same approach. (University of Pittsburgh, 2006). Agency theory is an administrative and monetary hypothesis that aims to clarify the connections and personal enthusiasm of professional associations. It describes the relationship between principals/operators and the allocation of control. It reveals the best way to compose connections in which one party decides the work and another party executes or decides choices in the interest of the central. This theory tends toward problems that emerge due to contrasts in the goals of desires between the principle and the agent. . This situation can occur because the principal is unaware of the operator's activities or because resources deny the principal access to the data. For example, the organization's managers may want to expand their business into different markets. This will lose the transient productivity of the organization for its next development and higher profits later. Nonetheless, investors looking for high and current capital development might not be aware of these projects. Another problem with agency theory concerned the vagaries of principle and agent. In some cases, an agent uses the assets of a key. In this way, although the principle is the leader, they generate almost zero risk since all misfortunes will be the weight of the primary. This is most often seen when investors provide budgetary support for an item that company directors use at their discretion. The specialist may have different risk resistance than the leader due to unequal risk transmission. However, agency theory, to address the operator's vital problems, requires a realignment of motivational forces. In the event that the authorities continue to take advantage of the increase in employment opportunities with private companies as an immediate consequence of the expansion of control of the industry, then the interests of the organizations are not legitimately defended. An open decision regarding representation might only partially resolve this problem by leaving authorities empowered to act to their greatest advantage after the race. Open workers often continue to profit from their management, which is a potentially irreconcilable situation for the industry (Investopedia, 2016). One of the office problems including tips from Bernie Madoff and Luis Felipe Perez. Thanks to Ponzi schemes, the office problem can have real legitimate and financial consequences for both culprits and speculators. A particularly well-known case in this area is that of Enron. Ponzi schemes involve a significant number of the most well-known cases. There are two positions for handling conflicts between major investors. During an extraordinary period, the company's supervisors are fully compensated based on changes in stock value. In this case, the expenses..