How does the lack of shareholder activism and the conflicts between services offered by public accounting firms cause conflicts in financial markets?
What will be an ideal response?
Scholar Kevin Bahr identified a number of causes for conflicts in financial markets:
Conflicts between services offered by public accounting firms: Because many public accounting firms offer consulting services to their clients, there are conflicts in the independence of the firm's opinions and incentives to generate additional consulting fees.
Lack of shareholder activism: Given the diversity of ownership in the market based on individual investors, collective efforts to manage and oversee the board are practically nonexistent.
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