“Agency problems” refers in this context to divergences in the incentives of management and shareholders that create possibilities for management to make decisions in their own, rather than shareholders’, interests, as well as for potentially expensive monitoring mechanisms for shareholders seeking to limit agency costs.
But the firm also needs to be commended for being the first among the auditing firms to organize a Seminar on Basel II for our local banking industry and for the audit profession. First, a few words to set out the reasons for Basel II.