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Legitimacy Theory - AFW3040

   

Added on  2020-03-01

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LEGITIMACY THEORY AND ITS TESTINGStudent Name: Student ID:

ContentsINTRODUCTION...........................................................................................................................................3MOTIVATION...............................................................................................................................................3PRACTICAL...............................................................................................................................................3THEORETICAL...........................................................................................................................................4LITERATURE REVIEW....................................................................................................................................4HYPOTHESIS.................................................................................................................................................6APPENDIX....................................................................................................................................................7REFERENCES..............................................................................................................................................102

INTRODUCTIONEach and every company is required to maintain the good corporate governance and is requiredto follow the generally accepted accounting policies and the relevant accounting standards. Incase the company does not follow then it will end up with the failure. In the literature review, thecompany’s mandatory or the voluntary disclosures have been discussed with reference to thebase theory which is known as the Legitimacy Theory. The presence of the legitimacy theory isvery essential in every business whether it is trading or manufacturing. The main focus has beenlaid down on the theoretical and the practical applications that are being followed by thecompany. It is related to the climate change that the country in which the company operates isfacing. Two variables have been considered – one is voluntary management (dependent) andother one is legitimacy crisis (independent). At first the motivational factors has been detailedand after that the literature review has been conducted with the hypothesis testing. The main aimor issue of the literature review is that what are the guidelines issued by the Governmentregulations and what motivates the companies to follow them. They follow it mandatorily orvoluntarily. With this aim the review has been divided into the different headings and the subheadings. MOTIVATIONThe issue of maintaining the climate in its original condition is very important in currentscenario. In the today’s world every company is emitting the carbon and thus is becoming thereasons for the climate change. The motivation of considering the issue for discussion has comefrom the below two factors: PRACTICAL The major source of the carbon emissions are the companies operating in different parts of theWorld. Every company shall work in such a manner that the carbon emissions shall be at theminimum and shall not affect in any manner to the society and the environment of the country.For doing this the company has started making voluntary disclosures as to how much they haveemitted during the year and how the financial performance of the company has been affected by3

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