Accounting Theory and Application

Running head: ACCOUNTING THEORY AND APPLICATION
Accounting Theory and Application
Name of the Student
Name of the University
Author’s Note

1ACCOUNTING THEORY AND APPLICATION
Table of Contents
Article..............................................................................................................................................2
Theory..............................................................................................................................................2
Analysis...........................................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

2ACCOUNTING THEORY AND APPLICATION
Article
The content of the provided article is about the huge amount of loss faced by Mark
Zuckerberg, the founder of Facebook, due to the Cambridge Analytica scandal. The article shows
the recent failure of Facebook to achieve the desired financial goals and milestones due to major
data privacy issues in regions of Europe, Myanmar, Sri Lanka and others. In order to overcome
this situation, Facebook has been working on the issue like data privacy of the users along with
the inclusion of meaningful content. The main aim of this analysis is to explain this issue of
Facebook in the lights of an appropriate accounting theory to get to an appropriate decision.
Theory
The presence of different kinds of theories can be seen to analyze the organizations issue
and Legitimacy Theory can be considered as one of them. All over the world, most use of
legitimacy theory can be seen in the social as well as environmental accounting areas. According
to the concept of legitimacy theory, legitimacy can be considered as a widespread insight or
assumption on the fact that the actions of the business entities are desirable, appropriate or proper
within some socially developed mechanism of norms, beliefs, values as well as definitions
(Burlea & Popa, 2013, p. 1579). It implies that legitimacy theory is the mean for supporting the
business organizations to implement as well as develop voluntary social and environmental
disclosures with the aim to accomplish the social covenants so that they can ensure their survival
in the agitated and unstable environment (Rogowski, 2015). In addition, this theory states that it
is considered as the failure of an organization when its activities do not comply with the moral
values of the society. Hence, in order to ensure its existence, an organization is needed to provide
the required justification with their social and economical actions so that it does not endanger the