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Thursday, December 12, 2019

Contemporary Accounting Issues Legitimation Strategies

Question: Discuss about the Contemporary Accounting Issues for Legitimation Strategies. Answer: Introduction Development in the field of science and technologies influence the progress of human civilization. It helped in establishing industrial revolution, which is one of the most important events of human history. As the development of human civilization provides greater facilities to the persons, it also has an adverse effect on human civilization; it hampers the ecological balance of the atmosphere by excessive carbon emission as well as other greenhouse gas emission (Bhimani, 2006). Moreover, in this modern age, the issue is becoming an alarming issue, and it increases the concern of the most of the environmentalist of the world. The main reason of the increment of carbon and other greenhouse gasses in the atmosphere is increasing the level of factories and automobiles, which improve the pollution level of the atmosphere so that it become a danger to the society and human civilization (Hassan, Wright and Struthers, 2013). In this context an organization has been formed with the name of Carbon Disclosure Project in the UK, the organization works with its shareholders along with the corporation to disclose the emission of greenhouse gas of the major firms, which is the primary cause of the climate changes and increasing public concern. Practical motivation Climate change is one of the main concerns of the environmentalist, and most of the factories and motor vehicle are the primary cause of the increment of carbon and other greenhouse gas emission in the environment. In this situation, it is necessary to identify the determinants of greenhouse emission and so that voluntary disclosure from the non-GHG registered firms is needed. The issues of climate changes as well as public concern over these particular problems due to climate changes have changed the environmental rules and regulation in recent days (Jones and Ratnatunga, 2012). These alterations focused on the decrement of GHG worldwide by implementing few important strategies such as carbon pricing. The practical motivation for undertaking the project is to recognize the source of voluntary disclosure of the firm about their carbon and greenhouse gas. The greenhouse gas emission is a critical issue of the modern civilization. Due to the incrementing factories and automobiles indus try the presence of the greenhouse gas has been increased in the atmosphere and that increase the concern among the people especially, the environmentalist honestly worried about the matter. In this context the Carbon Disclosure Project' a UK based company initiating to work to reveal the carbon and other greenhouse gas emission level of a company (Kopp, 2008). The practical motivation for working on this particular topic is that there is several research scholars are working on this specific matter, and it increase the interest among the people. Now the question is that these voluntary services provide actual information about the carbon emission of the company, or they provide false information to save the company from legal hazardous. Theoretical motivation The theoretical motivation of the research study is to find out the facets of voluntary disclosure and its role in the economy. The theories are utilized via the literature to provide the explanation about the voluntary disclosure, its determinant as well as the widespread resources of voluntary disclosure (Rankin, 2012). There are several different theories used to describe voluntary disclosure such as agency theories, signaling theory, capital need theory, along with legitimacy theory. The determinants of the voluntary disclosure are part of motivation along with constraint. At last, diverse source of voluntary information revelation is addressed and clarifying the reason of the most preferred information sources are the annual report of the companies. The present voluntary disclosure research can be segregated into three dominant pass financial voluntary disclosure, social voluntary disclosure as well as GHG voluntary disclosure (Sullivan, 2011). To establish itself as a corporate social responsible company, the company has to release the disclosures that provide additional advantages to the company and save from the legal hazardous. Literature review Article 1 With the evolution of carbon regulation and the pressure from the governments over the firms to reduce the rate of carbon emission, the stakeholders are bound to ask the firms to give detailed information about the practices of corporate climate change. This article by M. Eleftheriadis and Evgenia G. Anagnostopoulos has a big contribution in the international research that tries to understand and thereby establish the relation between environmental information disclosures and other additional firm factors (Eleftheriadis and Anagnostopoulou, 2015). To do this, an empirical analysis has been done on the relationship shared between the practices of corporate climate change disclosure of the firms mentioned in the Athens Stock Exchange with that of the different firm factors like that of size, profitability, activity sector, leverage, etc. Article 2 This particular article investigates the impact of carbon tax on the financial market return of the various firms present in Australia. With the different carbon profiles, the researchers have considered the differential tax effect on the individual firms. Factors like that of climate change policies, emission costs, and carbon disclosure have also been taken into account by them (Luo and Tang, 2013). The event study method has been utilized in this case to examine the market reaction to the seven key carbon legislative information events that have taken place within the period of February 2011 to November 2011. Article 3 Global warming is a reason for concern and this reason, the stakeholders all over the world have put agendas on climate change in different firms and also expect the firms to give relevant information about the green house gasses (GHG) (Depoers, Jeanjean and Jrme, 2014). In this article, the researchers have closely investigated the consistency of the information about GHG that has been voluntarily given by the French listed firms. Article 4 The main purpose of this article is to examine the way in which corporate environmental performance influences both the level of detail of the information about environmental issues disclosed by a firm and the type of information that is being revealed by the firm. The researchers have based their study on the content analysis of 533 firms of China (Meng XH, 2016). As per the results, it was found that both the poor performers and good performers disclose more information than the median or mixed performers. This thereby gives concrete empirical evidence to show that a nonlinear relationship exists between the corporate environmental performance of a firm and the information that is being disclosed by it. Soft information is mainly disclosed by poor performers while the good performers tend to disclose more solid information. Article 5 The researchers of this article have examined the roles played by the result and process dimensions of environmental performance to determine the financial performance of a firm or organization that can be measured by Tobin's q. Outcomes are referred to as the impacts that the firm has on the natural environment, and the processes are the steps or actions taken by the firm to reduce the level of the outcomes (Mpra.ub.uni-muenchen.de, 2016). The particular outcome on which the researchers have concentrated on this article is that of carbon emission. It has been suggested that the carbon emissions influences or affects Tobin's q in a non-linear manner. It has been observed that the highest financial performance achieved by a firm is not when its carbon performance is very high or very low, but only when it is an intermediate state. Article 6 The main aim or purpose of this particular article is to how the way in which two organizations behaves while disclosing nonfinancial information. The environmental, social and governance issues are getting priority for which this information need to be shared with the stakeholders. Article 7 Corporate responsibility of a firm mainly revolves around climate change and carbon footprints as they are the most important concerns of the society. The main aim of this particular article is to find out whether the different Australian companies have endeavored to adjust their carbon footprint related disclosures. It is needed to be determined whether the disclosure given by the firms tend to be more reflective of symbolism or that of the apparent behavior (Carbon footprints and legitimation strategies: symbolism or action?: Accounting, Auditing Accountability Journal: Vol 25, No 1, 2016). This has helped the researchers in understanding whether the disclosures are dominated by the pragmatic or moral legitimation approaches. Author Date Title Journal Type of Paper If empirical, Sample 100 word summary of contribution to the research question Ella Mae Matsumura, Rachna Prakash, Sandra C. Vera-Munoz October 2013 Firm-Value Effects of Carbon Emissions and Carbon Disclosures American Accounting Association Research Paper Hand collected carbon emission data between 2006 to 2008 were used which were by 500 firms. The results showed that market takes a penalty from all the firms due to carbon emission, and a more amount of penalty is levied on those firms that do not disclose information about carbon emission. Janice Lorraine Hollindale June 2012 Voluntary disclosure of GHG emission information by Australian Companies Research Paper 1776 companies have been studied in the year 2007, and 1853 have been examined in 2009. The results show that though the disclosure of voluntary greenhouse gas emission improves the condition and performance of some companies yet this cannot be stated as a generalized statement for all. Elizabeth Stanny 8th May 2012 Voluntary Disclosures of Emissions by US Firms Business Strategy and the Environment. Article Three exposure studies 500 US firms answering the questionnaire, disclosing discharge and also disclosing accounting methodology for emissions from 2006 to 2008. The results show that most of the firms give minimum information to avoid scrutiny. Logical Argument The key argument in the entire undertaken article are basically the global environmental issues created by the corporate by emitting carbon and other green house gases and its impact on the stakeholders and thereby the disagreement raises that the argument is sufficient to investigate the problems faced by the stakeholders. This becomes the logical argumentative issues that consist of inadequate government policies and the Acts. The entire articles, which are presented here to produce a logical argument about the undertaken, subject that whether the government policies and respective Act are enough to control the carbon and green house gas emission or not. Furthermore, it is also evaluate that the disclosure of carbon and green house gas emission by the corporate are followed strictly or not. Is the government rules are enough to enforce the corporate to disclose the accurate measurement of carbon emission and other green house gas emission by the company. The business activities of the company cause to the emission of green house gases and the governments fix the permissible measurement of carbon, other green house gas emission, and the companies are obligated to produce a disclosure about their carbon and other green house gas emission. However, most of the companies try to avoid the Government rule on this matter and provide inappropriate information to the government. Research question Are the government policies and Acts adequate to force the firms to disclose their environmental impacts such as carbon and other greenhouse gasses emission? Underlying theories As per the articles, the theory i.e. covered in the articles is the stakeholders theory which provides the information about the amount of the emissions taking place from the stakeholders point of view. As per the perspectives of the stakeholders theory, it provides the information that the amount of the GHG is seemed to be higher in CDP than CR. These theories are mentioned in all the articles as per their particular perspectives. The theories that are depicted in the above articles also deal with the emission of the green house gases, thereby it provides the information with the improvement in the steps, and thereby the perspectives for providing justification for the theories became successful. With focusing on the article Voluntary disclosure of GHG emission information by Australian Companies, the changes are not seen with bringing changes in the emission system followed by the companies in Australia. Henceforth the underlying theories depicts the reforms of the perspectives wit h considering the stakeholders and henceforth all the articles depicts the stakeholders theory. Variables Dependent Variable The dependent variable is the variable than an individual wish to predict, estimate and what is affected while executing the experiment and things that is affected in the experiment. It is the respond to an independent variable such as the effect of carbon emission on climate changes. Climate change is the dependent variable. The increase in the carbon emission level will affect the environmental balances and leads to climatic changes. The change in the climate is dependent variable as because increase or decrease in the emission level of carbon led to the change in climate. Therefore, depended variable is the one that depends on other factors. Independent Variable Independent variable is the variable that can be changed and one can control the variables. For an example, carbon emission is the independent variable, and increase in pollution level is the dependent variable. The increase or decrease in the carbon emission level lead to the increase or decrease in pollution level within the atmosphere. Emission of carbon level is independent variable which led to increase or decrease in the level of pollution. Therefore, independent variable is the one that does not change by the effect of other variables. Hypothesis The hypothesis of the research is; H1: The volume of carbon emission shows a negative relation with the market value of the equity share of the company. H2: Disclosure of the carbon and other green house gas management practice via the responses to the carbon disclosure practice questionnaire has positive relation with the market value of the equity. H3: There are significant relations between the carbon management disclosures and the market value equity. The value of equity is higher in case of the volume of carbon emission is lower; whereas value of equity is lower on case of the volume of carbon emission is higher. References Bhimani, A. (2006).Contemporary issues in management accounting. Oxford: Oxford University Press. Carbon footprints and legitimation strategies: symbolism or action?: Accounting, Auditing Accountability Journal: Vol 25, No 1. (2016). Accounting, Auditing Accountability Journal. [online] Available at: https://www.emeraldinsight.com/doi/abs/10.1108/09513571211191798 [Accessed 17 Aug. 2016]. Depoers, F., Jeanjean, T. and Jrme, T. (2014). Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports. Journal of Business Ethics, [online] 134(3), pp.445-461. Available at: https://link.springer.com/article/10.1007/s10551-014-2432-0 [Accessed 17 Aug. 2016]. Eleftheriadis, I. and Anagnostopoulou, E. (2015). The relationship between Corporate Climate Change Disclosures and Firm Factors. Business Strategy and the Environment, [online] 24(8), pp.780-789. Available at: https://onlinelibrary.wiley.com/doi/10.1002/bse.1845/full [Accessed 17 Aug. 2016]. Hassan, A., Wright, A. and Struthers, J. (2013). Carbon Disclosure Project (CDP) scores and the level of disclosure on climate change related activities: an empirical investigation of the FTSE 100 companies.IJSE, 5(1), p.36. Jones, S. and Ratnatunga, J. (2012).Contemporary issues in sustainability accounting, assurance and reporting. Bingley [England]: Emerald Insight. Kopp, M. (2008). Das Carbon Disclosure Project (CDP).uwf UmweltWirtschaftsForum, 16(2), pp.101-104. Luo, L. and Tang, Q. (2013). Carbon Tax, Corporate Carbon Profile and Financial Return. [online] ResearchGate. Available at: https://www.researchgate.net/publication/237197523_Carbon_Tax_Corporate_Carbon_Profile_and_Financial_Return [Accessed 17 Aug. 2016]. Meng XH, e. (2016). The relationship between corporate environmental performance and environmental disclosure: an empirical study in China. - PubMed - NCBI. [online] Ncbi.nlm.nih.gov. Available at: https://www.ncbi.nlm.nih.gov/pubmed/25113230 [Accessed 17 Aug. 2016]. Mpra.ub.uni-muenchen.de. (2016). Unraveling the effects of environmental outcomes and processes on financial performance: A non-linear approach - Munich Personal RePEc Archive. [online] Available at: https://mpra.ub.uni-muenchen.de/60359/ [Accessed 17 Aug. 2016]. Rankin, M. (2012).Contemporary issues in accounting. Milton, Qld.: John Wiley and Sons Australia, Ltd. Sullivan, R. (2011).Valuing corporate responsibility. Scheffield [England]: Greenleaf Pub.

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