Contemporary Issues and Legitimacy in Accounting †Free Samples

Question: Discuss about the Contemporary Issues and Legitimacy in Accounting. Answer: Introduction In the modern world, accounting is a significant aspect that is undertaken by all the organizations that are functioning in the current economy. It is seen that accounting is vital in understanding the financial position of the firm and what changes can be undertaken in order to improve the business performance. With respect to the topic that is given in the case study, it is seen that social contract is a significant aspect that has been established during the prehistoric time. It is seen that social contract is helpful in creating a collaboration among the employees and the stakeholders that are involved with the operations of the business (Mansell 2015). Legitimacy theory is an important aspect and therefore social contract can be implemented with respect to this theory. This topic has been taken into consideration as the theory of legitimacy helps in the development of the accounting structure of the firm and hence, there is a necessity for the application of social contract in the legitimacy theory. The information with regard to this topic has been gathered and established by taking help of various theories prepared by researchers hailing from various regions (Mena 2016). Hence, the construction of the paper, brings out the true colour that is essential for understanding so that social contract can be implemented in the legitimacy theory. Explanation of the relevance and application of Social Contract to Legitimacy Theory in Accounting As explained by Skyrms (2014) the theory of legitimacy in finance can be taken as a standard perception or else a hypothesis that the deeds of a specific entity are demanded, precise and accurate within a distinct socially prepared process of rules and regulations, the definitions as well as the principles. In this aspect, it can be said that legitimacy theory can be taken as one of the best mentioned beliefs and principles within the community and even in the ecological space. Conversely, the social contract theory discloses the information that from the initiation of the civilization of mankind, various social contracts have significantly aided both the government and the individuals to function and work in a close relation among each other. As stated by Steverson et al., (2013), the communities and the societies are mainly handled and supervised by the government effectively. There are several philosophers and ideologists who are in the outlook that individuals can attain certain benefits by living and surviving together and the requirement to trail various regulations and rules as well. It is seen specifically, that societies are the reason for the negotiations and the social contracts specially to give out the framework with respect to the way the individuals and the government can communicate and interact. Ogbuju Eneh (2016) undertook an analysis in order to bring out the effect of the environment on the current functions that are related to accounting as it is thought that accounting is more expected to be tangled in the method that is associated with the environmental problems. The social contract significantly demands that even though the primary aim of the business is to bring out profits, the organizations even has an principled obligations to perform in a manner that is socially accountable. This process of social contract is significantly a fundamental standard that is based on, which various theories of organizational revelations are crucially ba sed. Shafer-Landau (2014) proclaims that this standard even delivers a significant structure for analysing and studying the environmental assertions by several business organizations. Legitimacy theory is discovered to be one of the primary social theories that is significantly aided by the perception of distinctly social contract. In this spirit, this has been discovered to be an effective tool for explanation with respect to the regards to the idea environmental recording by various operational organizations. There are various aspects with the help of which the organizations propose to legalise their own activities by trying to gain the correspondence among the operations of the entity as well as the aims with respect to the values of the society (Lacey Lamont 2014). Within itself, it is important to consider that the model of legitimacy is one of the innumerable social theories that have been exploited in order to explain the causes behind the specifically environmental declarat ions and the perception with respect to the social contract. Conversely, there exists a profound doubt among the various researchers with respect to the offers that is given with respect to various charitable declarations of the organization. Quinn (2017) accurately puts forward the fact that there is a critical issue that has to be taken into consideration comprises of two assorted legitimacy concept categories, out of which one of them is the macro theory that is even known as the Institutional Legitimacy Theory. Specifically, this particular theory ties to deal in the process the organizational structure have attained the acceptance from the society largely. Muldoon (2016) orates that institutionalization as well as legitimacy are practically similar and both the consequences provides supremacy and power to the organizations primarily by making them look meaningful as well as natural. Weber (2014) explains correctly from the outlook of the accounting research, that gives out the time agenda and even undertakes questions that are considered, but the current environment of the business that counts the capitalistic structure, the form of government that is democratic and various others that are considered normally, a stationary setting within which the research is undertaken. Conversely, this belief requires to be considered carefully and then taken into consideration so that for a long term study of any sizeable length. Rogowski (2015) rightly puts forward that there are various layers with respect to the theory of legitimacy. At the initial stage, there are communities, religions, government and capitalism as well. The second level that is considered as organizational stage, there is presence of maintenance, extensions, establishments and defence. Glozer et al., (2014) states correctly that the strata that is below the primary stage is the organizational stage. Specifically, the fundamental structural legitimacy method with the help of which the companies try to look for permits as well as dodging from the various sections in a community. Significantly, bulk of the examinations that are associated with accounting have a tendency to bring out an understanding with respect to legitimacy. The organizations look for constructing a similarity among the diversified communalisms by the values that are associated to the standards of of sufficient behaviour with the background of a vaster framework that is in relation to the society. It is seen that with respect to the two varied processes of fixed value that are corresponding, it is seen that legitimacy of the firms is discovered to be present. Conversely, during the time when the real or when the probable disparity is present among the tow various value systems, it is seen that there will be a risk to the legitimacy of the organization. The business view of legitimacy is a functional resource that the firms eliminate competitively from the cultural atmosphere and that they hire in order to accomplish their aims and goals. Bitektine Haack (2015) orates that legitimacy can be taken as the resource that a specific company needs during the bid in order to operate. There are various operations as well as programs that raise the legitimacy and there are events that can reduce it. It is seen that reduced level of legitimacy can distinctly have dreadful phenomenon for a firm that can eventually lead to the loss of the authority to perform. There are chances when a consideration can be taken with respect to the firm to be a valid and thoughts are given regarding their validity, and this in real situation can turn into a bigger exercise to try to compute validity directly. There are strong after effects in this case but still the validity can be taken into account as a nonconcrete perception that brings out the reality by the various performers present in the social environment (Dagiliene 2015). Within itself, for an examiner to try and properly disclose the legitimacy of various firms can be seen to be actually a wider job, explaining the individual outlooks of the examiner. Furthermore, with respect to legitimacy, it is seen that it has commonly been depicted as resources that the companies requires to gain from the atmosphere. Conversely, during the time of analysing legitimacy as a distinct thing that can be altered among the institutes and it is seen that validity is properly taken as a significant segment of the situation of exchange as well as a phenomenon that is related to the give and take policy. Specifically, validity has a practical preparation and this represents as a depiction that is representational and specifically seen as a united analysis for an organisation and this is validated to several researchers as well as with the participants practically by specifically the movement of the resources. Conversely, the properties significantly have the requirement of the representational import so that it can function as a positive value in course of the cultural interchange. Moreover, validity can be taken as an upper order determination of that particular descriptions, which is a demo if explanations. Cheng et al., (2014) contradicts that precise framework in the region of legitimacy structure requires to investigate the relevant stakeholders and the process in which it motivates the resource flow that is essential for the foundation of the organization. Enhancement as well as the grow th, total existence, whether with the help of direct supervision or by the method of announcement with respect to goodwill. Crotty Ljubownikow (2016) explains that there are four various stakeholders in the firm and each of the stakeholders are known to handle the varied resources. Al stakeholders of the firm are inclusive of the condition that in turn handle the resources like the tax, contracts, legislation, regulations and grants. Furthermore, the stakeholders mostly the society even gives out benefaction like the consumers, assistance and support with respect to the interest of the labour and society. Additionally, the financial society is another significant stakeholder that handles and supervises the investment. Additionally, the stakeholders namely the media even handles various resources that are direct in nature and this can substantially have an influence on the stakeholders selection (Bebbington et al., 2014). Additionally, the organizations try to control the legitimacy as it aids in undertaking certain sustainable capital flow, labour and predicts terminates or overall ostracism of various commodities and several other offensive operations that are performed by the external parties. With the help of easing or else rectifying the various probable problems, the structural legitimacy gives out diversified managements with a specific degree of independence thereby to select the process with the help of which where and how the activities of the firm can be performed. It is seen that Lu Abeysekera (2014) correctly recognised that structural legitimacy theory intends that a firm can have four various levels that is in respect to legitimacy. Specifically, these stages are foundations of legitimacy, legitimacy maintenance, expansion of legitimacy and defensive diversified legitimacy. Conversely, the social components are associated with each of the stages of legitimacy. Stanny (2013) explains that the initial stage of the construction of legitimacy reproduces the initial stages of enhancement of a firm and have the tendency to turn around matters of capability, especially the financial ability. Furthermore, the business entities requires to be aware of the socially established measures of the quality with the request and the requirement to complete with respect to the identified codes of competence. Additionally to this scenario, the nest step comprises of the stages of the postponement of the legitimacy. It is seen that there may be a situation during which the organizations come to a new environment or market or even modifies the process with which it links to the modern stock exchanges. In reality, it is seen that such an effect can lead to postponement of legitimacy that is suitable to be powerful as well as vigorous as the management aim to obtain promise as well as supporting the customers who are mistrustful. It is seen that specifically, legitimacy can face risks by a distinct event that is intrinsic and extrinsic and as a result may need some defence. Bhme (2013) puts forward a comment that actions that are legitimate looks to be strong and responsive as the management looks to rectify the threat. While leaving out the main manifestation, it is predicted in the System of Western Capitalist that mostly all the organizations can frequently require to reserve the legitimacy. It is seen that this is the final stage that requires to likely to be the core concentration of the various examiners with respect to accounting. Furthermore, this even gives out the chance to evaluate critical connection among both the resources and legitimacy. In specific, the major paper that was precisely cited by several environmental and social researchers who are involved with accounting looks to be relevant with this scenario. The theory of legitimacy significantly proposes several researchers as well as widesp read society in a specific manner to logically unload diversified disclosures that are corporate in nature. Nonetheless, analysis as well as understanding of the current notion requires to be more differentiated and this primarily requires to be referred to differentiation developments both among the works that have been gathered and more than the same. This is what happens when the overall capacity of the distinct concept of legitimacy for the investigation of the widespread range of various disclosures to understood entirely. Muldoon (2016) focuses that the intelligence developed can be exploited for bringing out the grander and useful information to various makers of the decisions specifically to the stakeholders. Specifically in this way, the overall society can be gifted with the authority to have better controlling power and have the supremacy to handle and control the method of assignment of the possessions. Conclusion The conclusion of the paper reveals that the legitimacy perception is one of the various social theories that have been exploited to explain the believed reason behind the environmental statements and the perceptions with respect to the social contract. The present paper explains that that the cogency principle that has been one of the most recognised notions within the community as well as region of the environment. This paper aids in obtaining the wide-ranging knowledge about the fact that legitimacy that is critically a standardized notion or the beliefs that in turn explains that the engagements of specific unit are essentially demanded, suitable within the communally established process of the regulations, beliefs, explanations and principles. In this spirit, this paper aids in obtaining a summarized overview with respect to the fact that the concept of legitimacy is a robust tool for understanding skilful environmental and social disclosures that are proposed by the firm. This is helpful for grasping certain vehicles for undertaking a serious discussions. References Bebbington, J., Unerman, J., O'Dwyer, B. (2014).Sustainability accounting and accountability. Routledge. Bitektine, A., Haack, P. (2015). 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