Journal of Accounting Research -

Running head: ACCOUNTING RESEARCH
Accounting Research
Name of the Student
Name of the University
Author’s Note

1ACCOUNTING RESEARCH
Table of Contents
a) Application of Theories.....................................................................................................................2
b) Application of Issues.........................................................................................................................2
c) Research Objective, Aim and Questions............................................................................................3
Research Objective and Aim.............................................................................................................3
Research Questions............................................................................................................................3
d) Research Framework.........................................................................................................................3
Conceptual Framework......................................................................................................................3
Theoretical Framework......................................................................................................................3
Methodological Framework...............................................................................................................4
Analytical Framework.......................................................................................................................4
e) Information Sources..........................................................................................................................4
References and Bibliography.................................................................................................................5

2ACCOUNTING RESEARCH
a) Application of Theories
The title of this research is “Sustainability Reporting in Wesfarmers” which aims at
discussing different aspects of sustainability reporting mechanism in the company. Sustainability
reporting can be discussed in the lights of certain accounting theories; they are stakeholder theory,
legitimacy theory and agency theory.
Stakeholder Theory – Stakeholder theory shows that the expectations and viewpoints of different
types of stakeholders are needed to be taken by the firms’ managements; and these stakeholders have
major interests in the financial and non-financial performance of these business organizations. This
theory is the fundamental theory for explaining sustainability reporting because this emphasizes on
the need of the firms’ managements to recognize the environmental and other sustainability issues to
the internal and external stakeholders (Pérez‐López, Moreno‐Romero and Barkemeyer 2015).
Legitimacy Theory – Legitimacy theory states that a firm should have legitimacy in the sense of
social licence for operating in it and for using the required resources for carrying out the business
operations. This theory considers sustainability reporting as a medium of contract socially between
the business organizations and the society. This provides these firms with the required legitimacy to
carry out the business operations in the society (Martínez‐Ferrero, Garcia‐Sanchez and Cuadrado‐
Ballesteros 2015).
Agency Theory – Agency theory emphasizes on the significance to select particular accounting
methods while focusing on the relationship between the agents and the principals. Overall agency cost
can be majorly reduced through the disclosure of additional data on the corporate social responsibility
and sustainability related initiatives of the companies. Investors and other key stakeholders become
able in more accurate assessment of the firms in the presence of sustainability and corporate social
responsibility initiatives related information (Searcy and Buslovich 2014).
b) Application of Issues
The presence of different types of issues can be seen in sustainability reporting and the
companies are required to put emphasis on these sustainability reporting related issues. In Australia,
sustainability reporting has major significance to the stakeholders of the firms which has put the
obligation on the Australian Securities Exchange (ASX) listed companies to adopt this. However, the
presence of multiple sustainability reporting framework which is making the companies confusing
and creating conflicts; but every framework has its own purpose and rationale (Calabreseet al.2016).
The next issue is the presence of multiple target audience. While financial statements target the
investors of the firms, sustainability reports cater to the need of different target audience having
different expectations on what the company should be reporting. This creates challenges for the
companies to develop sustainability reports while fulfilling the needs of all target audiences. The next