Contemporary Issues in Accounting: A Research Report Analysis

This report delves into the contemporary issue of sustainability reporting within the field of accounting. It begins by establishing the importance of sustainability for stakeholders and corporations, highlighting the increasing awareness of environmental, social, and governance issues. The practical motivation stems from the growing stakeholder concern for sustainability, transparency, and effective market functioning. The theoretical motivation focuses on addressing the gaps in current sustainability practices and the consistency of disclosures. The report reviews literature on sustainability reporting practices, emphasizing its role in corporate strategy and transparency. Key theories, including agency, stakeholder, and legitimacy theories, are examined to understand the dynamics of sustainability reporting. The analysis includes critical evaluations of existing research, presenting a hypothesis regarding the effectiveness of sustainability reporting practices. The paper concludes by assessing the company's intentions for the disclosures on the different sustainability issues, for instance environment, community, people, customers, employees and others, and how it impacts stakeholders.

Running Head: CONTEMPORARY ISSUES IN ACCOUNTING
CONTEMPORARY ISSSUES IN ACCOUNTING
Name of the Student
Name of the University
Author Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction................................................................................................................................2
Practical Motivation...................................................................................................................2
Theoretical Motivation...............................................................................................................3
Literature Review.......................................................................................................................3
Practices of Sustainability Reporting.....................................................................................3
Hypothesis..................................................................................................................................7
Reference....................................................................................................................................8

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Introduction
Sustainability forms core of the corporate sustainability as well as it is of utmost
concerns for all stakeholders. In the recent few years, the awareness among corporates have
been increased for addressing the issues related to the governance, social as well as
environment for contributing towards the sustainable development. The sustainable
organization development occurs by the improvement of their social and the environmental
performance. However, this has become the global challenge for almost all the businesses
around the world for sustain in the long run. The requirements for incorporating sustainability
practices into the core strategy of the business are need of the hour (Higgins, Milne and Van
Gramberg 2015).
During the past two decades, the need for the corporate sustainability as well as
reporting of the practices of sustainability has acquired pivotal importance, which has
become integral part of overall business strategy of company. Further, increase in concerns of
negative social and environmental impact has resulted into analyzing the company’s
effectiveness in sustainability reporting practices. Hence, this research paper will discuss
regarding effectiveness of sustainability reporting practices adopted by firm.
Practical Motivation
The stakeholders off the economy in the recent years are more concerned about the
sustainability practices. The increasing practice of the sustainability reporting has created
transparency as well as help market for functioning in the more effective as well as efficient
manner. Further, the decisions made by stakeholders are based on the understanding of
effectiveness level of the disclosures made by the company on various aspects.

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Theoretical Motivation
This research paper addresses the recent gaps in the practice of sustainability practices
of firm in context of effectiveness as well consistency of current sustainability disclosures
practices. It has been analyzed that despite of rising interests of academics and practitioners
on sustainability practice, still the gap exists. This gap motivates to do the research on
effectiveness in sustainability reporting practices implementations.
Literature Review
Practices of Sustainability Reporting
The pressures from the stakeholders have compelled the businesses for proving their
transparency, accountability as well as effectiveness of governance through the disclosures of
the corporate sustainability. Sustainability is defined as the ability for existing constantly.
Moreover, sustainability reporting practices is the report that is published by the company
about social, environmental as well as economic impacts that are caused by day-to-day
business activities. The fundamental for achieving the sustainable practices is building as
well as maintaining the trust level in businesses (Dissanayake, Tilt and Xydias-Lobo 2016).
In order to cater the diverse needs of the stakeholders as well as achieving the
continuous improvements, it becomes important for the businesses for engaging with the
targeted stakeholders and obtaining the meaningful feedback on their processes of
performance as well as reporting. This helps in meeting the demands of stakeholders as well
as improving the future sustainability agenda of businesses. Further, the effectiveness of
sustainability reporting practice is more or less dependent upon company’s intention for its
implementation. Sustainable reports the real picture of company in relation to sustainable
practices. The two important variable includes consistency ad intention of implementing

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sustainability practice as dependent variable and sustainability reporting practices as
independent variable (Hughen, Lulseged and Upton 2014).
Framework
The agency theory is based on managers and owners relationships. There is
informational asymmetry as well as conflict of interest between company’s managers and
other stakeholders. This theory has gained significance after the series of scandals of the
corporate failures. The perceived risks of the company by the investors will be high, if
company does not make public disclosures. Therefore, sustainability reporting reduce this
informational asymmetry and perceived risk by investor by increasing market efficiencies
and reducing cost of the capital (Lodhia and Hess 2014).
The stakeholders’ theory has been emerged as the backbone of the sustainability
reporting. This theory makes the basic assumptions that the strategic management leads
towards the competitive advantages, which allows the higher level of the value creation. The
firms are having the accountability for broad stakeholders compare to only investors. The
sustainability reporting practice signifies towards strengthen the relationship between society
and firms, under which the companies is operating. In case of ignorance of stakeholders’
interest, there would be greater impact on company’s reputations, which would unfavorably
affect their financial performances (Jorge et al. 2015).
The legitimacy theory is related to the stakeholders’ theory, as the legitimacy is
something that is granted by the stakeholders of the organization. The companies are required
to justify their actions as well as ensure the understanding among all various stakeholders.
This theory stresses on the fact that organization should be accountable towards their actions.
The sustainable reporting stresses on the importance of the demonstrations of the social

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values that are created while operating in the environmentally sustainable manner
(Fernandez-Feijoo, Romero and Ruiz 2014).
Critical Analysis
Greiling has stated in his article that there is existence of possible gap when it comes
to link public accountability to the practices of sustainability reporting. The author stated that
reporting as well as level of the accountability must needs to be evaluated with respect to the
informational needs as well as readers of report (Greiling and Grüb 2014).
Amran has stated that sustainability reporting may not be voluntary with the rapid
changing reporting outlook as well as emergence of the standards and regulations. The author
stated that sustainability practice is now become important for the operational success.
Further, the business organizations are into greater pressure because of the increasing level of
the awareness among the stakeholders, which has resulted into moving towards disclosures
by the firms (Amran and Keat Ooi 2014).
Charl has stated regarding new conceptual model of sustainability practices of
corporate with management control & reporting in his article. According to author,
integration of sustainability practices with the management control & reporting practices
offers great benefit in terms of providing better operations and better communications.
Sustainability practices of the organization could improve in the better way by the help of
understanding and implementing balance scorecard practices (De Villiers, Rouse and Kerr
2016).
Rodrigo in his article has given the statement in his article that the company’s
decisions regarding publishing the sustainability report is influenced by their internal
motivations and external stimuli. Further, it is internal motivation plays vital role in practices
of company’s sustainability practices (Lozano, Nummert and Ceulemans 2016).

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Wan Karimah has given the statement in his article that the organizations have in
general clear sustainability policy for planning and make commitments regarding protecting
environment and acting responsibly towards their practices. However, the major concern
arises in converting policies and the company’s commitments in the measurable indicators.
This help the company to easily access their current position in relation to the practices of
sustainability and identifying priority areas for leading towards effectiveness of the strategy
implementations of sustainability (Wan Ahmad, de Brito and Tavasszy 2016).
This research paper has attempted to find the gap of the existing literatures on the
evidences that whether the organization implements the practice of sustainability on
documents or whether they actually mean that they are concerned about the sustainability
practices for the stakeholders to show that they actually mean what is being reported. This
paper has focused on the company’s intention to report effective sustainability practices.
There are certain companies who follow sustainability practices just on paper by merely
putting tick mark on the disclosures checklist. Although, in reality they are not much prone to
the practices of sustainability for the aspects of environment, economic, social, community
and environmental aspects (Piecyk and Björklund 2015). The organizations are required to
follow the laws that relates to sustainability for the disclosures relating to various sustainable
concerns of organization. Further, the focus of this research paper is on company’s intention
to follow practices of sustainability reporting in effective manner and whether in the
contemporary business scenario, its practices is increasing or not. In this concern, many
academics as well as researchers have provided their views and evidences that highlights the
major concerns relating to practices of disclosures and reporting effectiveness by the
companies (Fonseca, McAllister and Fitzpatrick 2014).
Hence, significant increases in the effectiveness of practices of sustainability
reporting majorly depends on the company’s intentions for the disclosures on the different

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sustainability issues, for instance environment, community, people, customers, employees
and others. The practice of sustainability reporting plays important role for company’s
stakeholders. The shareholder of the company as well as other stakeholders takes their
decisions based on organizational views and disclosures made by them on the sustainable
practices (Lodhia and Hess 2014).
Hypothesis
Following are the hypothesis, which is developed after the critical analysis of the
issues and researches on the topic of sustainability reporting practices by the companies:
 H0: There is significant increase in effectiveness of the implementing the
sustainability reporting practices by contemporary organizations.
 H1: There is no significant increase in effectiveness of the implementing the
sustainability reporting practices by contemporary organizations.

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Reference
Amran, A. and Keat Ooi, S., 2014. Sustainability reporting: meeting stakeholder
demands. Strategic Direction, 30(7), pp.38-41.
De Villiers, C., Rouse, P. and Kerr, J., 2016. A new conceptual model of influences driving
sustainability based on case evidence of the integration of corporate sustainability
management control and reporting. Journal of Cleaner Production, 136, pp.78-85.
Dissanayake, D., Tilt, C. and Xydias-Lobo, M., 2016. Sustainability reporting by publicly
listed companies in Sri Lanka. Journal of Cleaner Production, 129, pp.169-182.
Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Effect of stakeholders’ pressure on
transparency of sustainability reports within the GRI framework. Journal of business
ethics, 122(1), pp.53-63.
Fonseca, A., McAllister, M.L. and Fitzpatrick, P., 2014. Sustainability reporting among
mining corporations: a constructive critique of the GRI approach. Journal of cleaner
production, 84, pp.70-83.
Greiling, D. and Grüb, B., 2014. Sustainability reporting in Austrian and German local public
enterprises. Journal of Economic Policy Reform, 17(3), pp.209-223.
Higgins, C., Milne, M.J. and Van Gramberg, B., 2015. The uptake of sustainability reporting
in Australia. Journal of Business Ethics, 129(2), pp.445-468.
Hughen, L., Lulseged, A. and Upton, D.R., 2014. Improving stakeholder value through
sustainability and integrated reporting. The CPA journal, 84(3), p.57.
Jorge, M.L., Madueño, J.H., Cejas, M.Y.C. and Peña, F.J.A., 2015. An approach to the
implementation of sustainability practices in Spanish universities. Journal of Cleaner
Production, 106, pp.34-44.

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Lodhia, S. and Hess, N., 2014. Sustainability accounting and reporting in the mining
industry: current literature and directions for future research. Journal of Cleaner
Production, 84, pp.43-50.
Lozano, R., Nummert, B. and Ceulemans, K., 2016. Elucidating the relationship between
sustainability reporting and organisational change management for sustainability. Journal of
cleaner production, 125, pp.168-188.
Piecyk, M.I. and Björklund, M., 2015. Logistics service providers and corporate social
responsibility: sustainability reporting in the logistics industry. International Journal of
Physical Distribution & Logistics Management, 45(5), pp.459-485.
Wan Ahmad, W.N.K., de Brito, M.P. and Tavasszy, L.A., 2016. Sustainable supply chain
management in the oil and gas industry: a review of corporate sustainability reporting
practices. Benchmarking: An International Journal, 23(6), pp.1423-1444.

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Appendix
Author/s Date Title Journal Type of
Paper
(Theoretical
or Empirical)
If empirical,
dependent &
independent
variables
Summary of contribution to the
research question
Dorothea
Greiling and
Birgit Grub
2014 Sustaina
bility
reporting
in
Austrian
and
German
local
public
enterpris
es
Journal
of
Econom
ic Policy
Reform
Theoretical The research by the author has
contributed towards the
sustainability reporting practices
of public enterprises over the
private sector. In comparison to
the private sectors, the
expectations as well as
obligations are higher because the
public ownership as well as
objectives are associated with
public mission. This paper
provides certain information that
is concerned with the link
between the public accountability
as well as sustainability reporting
in the public utilities.

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Azlan Amran
and Say Keat
Ooi
2016 Sustaina
bility
reporting
-
meeting
stakehol
der
demands
Account
ing
Journal
Theoretical This research has contributed
towards the acknowledgement of
the necessity of the sustainability
reporting. The increased level of
the awareness among the
stakeholders regarding their rights
has resulted into greater pressures
to the firm. This paper has
highlighted the availability of
various strategies as well as
mechanism to the stakeholders for
making organization listen to
them.