Accounting Presentation: Legitimacy Theory and Practice (Module Name)

This presentation explores legitimacy theory and its profound impact on accounting practices. It begins by defining legitimacy theory, emphasizing how organizations strive to align with societal norms and values to maintain their social license to operate. The presentation delves into the concept of the social contract, highlighting its dynamic nature and the evolving expectations of both businesses and society. It distinguishes between institutional and organizational levels of legitimacy, explaining how both contribute to an organization's perceived acceptance. The presentation examines the lifecycle of legitimacy, from gaining to maintaining and potentially losing legitimacy, offering insights into how companies manage their public image through disclosures. It clarifies the relationship between legitimacy and accountability, and discusses the usefulness of legitimacy theory for researchers and stakeholders. Finally, it addresses criticisms of the theory and how it is viewed by researchers in accounting, emphasizing its role in understanding management motivations for voluntary disclosures and risk management strategies.