Accounting Theory and Practice | Assignment

Running head: ACCOUNTING THEORY AND PRACTISE
Accounting Theory and Practise
Name of the Student
Name of the University
Author Note

1
ACCOUNTING THEORY AND PRACTISE
Table of Contents
Answer to Question 1...................................................................................................................2
Answer to Question 2...................................................................................................................2
Answer to Question 3...................................................................................................................2
Answer to Question 4...................................................................................................................3
Answer to Question 5...................................................................................................................3
References....................................................................................................................................5

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ACCOUNTING THEORY AND PRACTISE
Answer to Question 1
Organisational legitimacy is a situation in which an organisation is considered to be
complying with the expectations placed by the community upon it. With the passage of time, the
community expectations also tend to change. Hence, it is essential for the business to keep track
of these aspects for its survival. Legitimacy theory can be considered as a resource because an
organisation tends to depend on it for its survival. It is wanted by every organisation as it helps it
thrive in the long run. In a similar manner to other factors of production like raw materials, land
and labour, legitimacy is also necessary for a business to thrive.
Answer to Question 2
The main aspect of the existence of the organisational legitimacy is dependent on the
entity meeting the expectations placed upon it by the community. This is also referred to as
fulfilling the social contract. However, as the expectations of the community change over time,
the terms and conditions of the social contract also tend to change with it. A business practice
which was previously acceptable may not be acceptable in the current scenario due to changes
occurring in the place of the business. Hence, the organisational legitimacy is determined on the
basis of the changes occurring in the place and time of business.
Answer to Question 3
The main factor that needs to be considered in this situation is the expectations placed
upon the business by the society. Some of them include maintaining the air quality levels and not
contaminating the water bodies near the business. There is a direct relationship between the
legitimacy of the organisation and its responsibilities towards the society. If the environmental
event impacts a large section of the society, it would result in a long lasting damage to the