Advanced Accounting Theory 2022

Running Head: ADVANCED ACCOUNTING THEORY
ADVANCED ACCOUNTING THEORY
Name of the Student
Name of the University
Author Note

1ADVANCED ACCOUNTING THEORY
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Legitimacy Theory.................................................................................................................2
Integrated Reporting in Australia Post...................................................................................3
Conclusion..................................................................................................................................4
Reference....................................................................................................................................5

2ADVANCED ACCOUNTING THEORY
Introduction
The concept of integrated reporting is created for better articulating broader ranges of
the measures, which contributes to the long-term value and role played by the organization in
society. In today’s business environment, an entity creates do not only generates value for
their shareholders, but also for the society at large by means of the sustainable strategy.
Further, according to legitimacy theory, entities discloses the social responsibility
information for presenting a socially responsible image. It is done so that entities can
legitimize their behaviors to the stakeholder’s groups. In case, if an entity does not justify its
business activities, then community in which they are operating, may revoke its contract with
that entity (Beck, Dumay and Frost 2017). Hence, in this report discussions will be on
legitimacy theory, followed by reviewing of integrated reporting of Australia Post based on
the legitimacy theory.
Discussion
Legitimacy Theory
Legitimacy theory is the notion derived from organizational legitimacy that is status
or condition, which exists when value system of the organization is consistent with value
system of the larger social system in which organization exists. When potential or actual
disparity exists between two value system, then there is great threat to the legitimacy of
entity. The theory of legitimacy posits that the entity continuously seeks to ensure that they
are operating within norms and bounds of the respective societies. For the adoption of
perspective of legitimacy theory, an entity would voluntarily report on the activities, if
management perceives that those activities were expected by the communities in which entity
is operating (Deegan 2002).