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Business firms are owned, financed and managed different group of people. They certainly have their own personal interest. Owners interest is to maximized creditors interest will maintain sufficient liquidity and to safeguard their fund .similarly, the board of members and managers employee, interest may be reduced in working hour and maintain a better standard of living for them. In this way increases the operating expenses and reduce the profitability, which is against the interest of common stockholder therefore in every firm, there is a possibility of conflict among different interest group. It is called agency problem.