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Accounting Theories Assignment (Solution)

   

Added on  2020-12-29

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Accounting Theories

Relevance to ArticleCorporate Governance helps in enhancing the financial performance of firms and alsoassists in disclosing the Corporate Social Responsibilities (CSR) activities outcomes in contextwith Stakeholder and Agency theory as well. Aslam and et.al., (2018) carry out the research inorder to know whether corporate social responsibility' disclosure and financial performance offirms is influence by corporate governance and intellectual capital or not. To answer thisquestion, researchers accumulated data from all Australian firms listed at Australian StockExchange for year 2014. Any organisation engages in CSR activity due to numerous reasons andit was difficult for researchers to elaborates the impact of Corporate Governance and IntellectualCapital on CSR activities by utilising single theory. Thus, they selected four theory which werelegitimacy theory, agency theory, resource based view theory and stakeholder theory.Researchers in the articles investigated the influence of intellectual capital and corporategovernance and CSR disclosure in line of ASX listed companies. For this 1456 ASX listedorganisations have been selected whose annual reports were presented on electronic medium andwhich provides information about corporate governance structure. Corporate SocialResponsibility is attached to Corporate Governance (Aslam and et.al., 2018.). By beingtransparent and disclosing each and every principal of Corporate Governance enhances the firm'sability to perform CSR and will also eventually improves its financial performance. Stakeholdertheory and legitimacy theory are two core perspective on the relationship of CG and CSRdisclosures. As stakeholder theory involves various stakeholders associated with the firm andlegitimacy theory concerend about the whole society thus, these theory helps in explaining theimpact of CG and intellectual capital disclosures on Australian firms financial performance andCSR activities. Personal ReflectionCorporate Governance and Intellectual Capital impacts greatly firms financial performance andcorporate social responsibility disclosure. I believe that in order to sustain effectively in presentcompetitive environment it is essential that management disclose principals of corporategovernance explicitly. In the article I found that researchers succinctly carry out their research inwhich they formulated hypothesis on the basis of four theories. Disclosure of intellectual capitalin the financial statement is now become significant for firms in order to develop value of theorganisation. From the viewpoint of authors value creations through traditional capital is not1

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