ACCT6007 Financial Accounting Theory and Practice Report Sample

Sample ACCT6007 Financial Accounting Theory and Practice Research Report

Context:

This assignment develops research and critical thinking abilities. It is a critical analysis/review of an academic article. Changes in technology are impacting accounting and how accountants perform their jobs. This activity will provide students information on new trends in accounting field.

Instructions:

Answer the following questions in your critical review:

1. Research and briefly explain Institutional Theory and Legitimacy Theory of Accounting?

2. Evaluate and assess adoption of Information Technology in Accounting through Institutional Theory and Legitimacy Theory perspective of Accounting. Use examples to illustrate how accounting systems are institutionalized within organizations and provide external legitimacy.

3. Critically evaluate the propositions made by the authors. Do you agree or disagree with the 4 propositions in the article? Explain your point of view and provide evidence from other academic resources.

4. Comment on any strengths and weaknesses of the article.

To answer all the above questions: Review the article provided and search for related academic journal articles. Use minimum 10 academic references.

Solutions

Introduction

Transformation into the technologies is influencing the procedure of accounting and the role played by the accountants performing their jobs. This is further presented in an essay form enabling the development of research and critical thinking capabilities in reviewing an article. The incorporation of information technologies acts in improvising the functions of the accounting influencing the organisations. For Assignment Help However, it is often argued that the systems of accounting are institutionalised among organisations providing external legitimacy. Reviewing the overall article with a critical perspective one can able to adhere a detailed perspective of the study.

Institutional Theory and Legitimacy Theory of Accounting

As mentioned by Hope and Vyas (2017), institutional theory enables upon elaborating on the organizational processes and form's homogeneity. The perspective of institutionalisation is referred to as the process enabling the expectations of the society to generate the ideas about the organizational behaviours and forms which mainly evolve out from the actions and thought. On the other hand, De Luca and Prather-Kinsey (2018) stated that institutionalization is the underlying process for which the formal structure attains wide acceptance as an essential element in providing legitimation. Theory of institutions deliberately adopts the assumptions of considering management and structural practices which the other firms grant those for being legitimate. Hope and Vyas (2017) argued that one way of understanding the institutional theory is of accepting the idea of isomorphism. Institutional theory is recognized to be elaborating the choice of organisations about accounting within their operations. According to De Luca and Prather-Kinsey (2018), accounting systems play an important role in allowing a linkage between the defined beliefs in the institutions to that of technical activities.

Theory of Legitimacy stresses how the structure of the organisation gains recognition over an immense sphere. According to Hope and Vyas (2017), the crucial role of accounting is a vital organisation resides upon providing support for the process of legitimation of the organisation. Habib and Hasan (2019) argued that the organizational failure is considered to be legitimated and further influenced the economic, legal, or sanctions socially into the society. Therefore, there pertains to be the ardent need for organisations upon adopting the structures which portray it as to be legitimate within its environment. The symbol of legitimacy in the organisation is from the perspective of accounting. Habib and Hasan (2019) stated the accounting processes include recording, preparing financial systems, internal controls that determine the performance within the organisations and considers itself as a legitimate tool, signaling the environment that the organisations shoeing operations legitimately.

Incorporation of Information Technology within Accounting with the help of Institutional Theory and Legitimacy Theory of Accounting

According to Pendley (2018), technology is considered to be the basic sense within the mechanisms through which the organisations can produce out the services and products. Under this sphere of advancement in technology and rapid growth, the accounting field is supposed to be not isolated with the usage of technology. The effectiveness of decision-making can further be deciphered with the proper incorporation of information technology. Wu and Jia (2018) viewed that the usage of information and technologies of communication have immensely modified the nature of both the accounting as well as the business. With the recognition of the information technology, proper identification as well as opportunities can quickly be identified and further taken for resolution. Information technology is implemented mainly to bring out effectiveness and efficiency over to all of the tasks. The aspect of the quality and the speed both are enhanced for this basis. With the application of the technology, there leads to an increase in the sources for information and thereby, reduces the inclusion of the human actors.

Examples: Systems of Accounting getting institutionalised and external legitimacy

Several of the accounts can further be recognized as institutional accounting like that of the insurance company, pension fund, or that of a registered investment company. On the other hand, Su, Zhai & Karlsson (2017) viewed that some of the regulators often known to be that of MSRB make it possible to further apply the term upon generalizing to involve the inclusion of the banks as well as the individuals. It is been represented in such a way that they can further be retaining the capability of investing with a large sum of money. On the contrary, Yusuf and Srithongrung (2017), the practice of institutional accounting further relies on the term of external legitimation, and thereby in such a case the outsiders are further not provided upon interfering with the domestic governance.

Propositions

The article demonstrates four crucial propositions which evaluations would be as follows. According to Agyekum and Singh (2018), it considers the first proposition as the modification into the practices of accounting are evolved with the new technologies’ adoption raises the accounting role as a mechanism for the organisational institutionalisation. On the contrary, Pendley (2018) argued with the newer implementation of technologies over the accounting process makes the calculation error-free and allows more efficient results enhancing the progress of the organsisation.

The second proposition of the article highlights that the modifications practice due to adopting new technological applications raises organisational legitimacy. On the contrary, Mele Domenec, Rosanas and Fontrodona (2017) argued for an organisation to be implemented as legitimate requires to fulfill the inclusion of socially desirable norms, values and standards.

The third proposition concerns that the modification within the practices of accounting for the technology incorporation raises the overall performance of the firm. Pendley (2018) stated that the overall performance will show an extreme raise and thereby holds efficient results. The productivity of the firm would result in an effective increment and specifically in a short duration. As the underlying processes of accounting require implementation of more time, therefore, the newer application of technologies proposes a reduction in time.

Modifications within the practices of accounting due to adopting the newer technologies are heavily institutionalised requiring the transformation in the counting field. Smith and Urquhart (2018) argued that not only the changes are necessary within the accounting field it is similarly important to practice the changes in the accounting field. The employees as well as the subsequent members require the implementation of immense knowledge and skills such that they can carry out the processes accurately over the newer technologies. According to Su, Zhai & Karlsson (2017), the incorporation of the new method requires the time which should have to be allowed to the members for gaining an effective otherwise as, without adjustment with the working of the new technologies, the work can get dismantled.

Strengths

Advancement within the information technologies is narrowing the accounting process of traditional background and thereby, acts well in drawing improvisations over efficiencies. For this, we can further negotiate that the financial managers are expanding their focus in allowing to take strategic decision making. According to the paper, Agyekum and Singh (2018)., systems of accounting initiated by the organisations range from budgeting, recording, taxation, and internal controls on an immense pedestal among the societal eyes as an accurate organizational structure. Another vivid evaluation can be gathered from the perspective of the paper that the accountant role within the organisation has transformed from mere spectators into active players within the process of management. On the other hand, the paper remains successful in presenting that accounting poses a significant role in enabling legitimacy for organisations. The transformation taking place into the accounting process and that of the systems is due to the advancement in the information technologies which can be well deciphered from the study.

Weaknesses

The paper fails upon indicating what amount of transformation poses the requirement for newer information technologies to influence the institutional transformation into the process of accounting. On the other hand, the time specification is not predicted to be clear in the case of the change of one accounting system to another one. Agyekum and Singh (2018) stated that discussion again failed to evaluate the organisational size as the size of the firms plays an important role when new technology is adopted impacting accounting system. Measurement of the level of change is extremely difficult and therefore the thinking about study implemented vagueness. The effects and the motivation of acceptance of a technology-driven change are required to be industry-specific. The goal of the overall study resides upon introducing the immense concepts and thereby, for which the future researches can achieve the capability of examining the other issues. Moreover, the technology level is found to be varied for varied levels of organisations. This paper again proposes the limitation of not involving the degree of technological requirement advancement for different organisations.

Conclusion

Systems of accounting are important for the organisations since they are important in allowing organisational institutionalisation in providing legitimacy. The systems of accounting within the organisations incur great effectiveness with the new incorporation of the technologies. It thus poses a requirement of enabling the institutionalisation at first within organisations. New installations of the technologies further allow legitimating with that of the external stakeholders. The reputed and used technologies influence some of the accounting functions resulted from several technologies intitutionalised into the field of accounting. Modifications into the accounting system concerning the growth in technology enhance the accounting role in predicting the organizational legitimacy.

Reference List

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Sample ACCT6007 Financial Accounting Theory and Practice Research Report

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