SUBJECT : ACCOUNTING: THEORY AND EMERGING ISSUES

QUESTION 5 a. Stakeholder theory, Institutional theory and Legitimacy theory focus on the role of information and disclosure in the relationships between organization, the state, individual and group (Deegan,2014). Required: Discuss how Legitimacy Theory can be applied to explain why an entity might elect to make particular voluntary disclosure. (10 marks) According to International Integrated Reporting Committee (IRC), one of the objectives of Integrated Reporting is to rebalance performance metrics away from an undue emphasis on short-term financial performance (Deegan, 2014). Required: Explain two limitations of traditional financial reporting in enabling users to assess a reporting entity's social and environment performance. (5 marks) b