This paper serves as an introduction to this special issue of Accounting, Auditing & Accountability Journal; an issue which embraces themes associated with social and environmental reporting (SAR) and its role in maintaining or creating organisational legitimacy. In an effort to place this research in context the paper begins by making reference to contemporary trends occurring in social and environmental accounting research generally, and this is then followed by an overview of some of the many research questions which are currently being addressed in the area. Understanding motivations for disclosure is shown to be one of the issues attracting considerable research attention, and the desire to legitimise an organisation’s operations is in turn shown to be one of the many possible motivations. The role of legitimacy theory in explaining managers’ decisions is then discussed and it is emphasised that legitimacy theory, as it is currently used, must still be considered to be a relatively under‐developed theory of managerial behaviour. Nevertheless, it is argued that the theory provides useful insights. Finally, the paper indicates how the other papers in this issue of AAAJ contribute to the ongoing development of legitimacy theory in SAR research.

Introduction: The legitimising effect of social and environmental disclosures – a theoretical foundation

Much of the extant research into why companies disclose environmental information in the annual report indicates that legitimacy theory is one of the more probable explanations for the increase in environmental disclosures since the early 1980s. Legitimacy theory is based on the idea that in order to continue operating successfully, corporations must act within the bounds of what society identifies as socially acceptable behaviour. The purpose of the practical research undertaken and reported in this paper is to extend the applicability and predictive power of legitimacy theory by investigating to what extent annual report disclosures are interrelated to: attempts to gain, maintain and repair legitimacy; and the choice of specific legitimation tactics. The quasi‐experimental method adopted utilised semi‐structured interviews with senior personnel from three large Australian public companies. The findings indicated support for legitimacy theory as an explanatory factor for environmental disclosures. Moreover, findings about the likelihood of specific micro‐legitimation tactics being used in response to legitimacy threatening environmental issues/events, and dependent on whether the purpose of the response is designed to gain, maintain or repair legitimacy, are reported.

Environmental disclosures in the annual report: Extending the applicability and predictive power of legitimacy theory

https://www.mv.helsinki.fi/home/aula/Top20/Media%20Reputation%20as%20a%20Strategic%20resource.pdf

Media Reputation as a Strategic Resource: An Integration of Mass Communication and Resource-Based Theories

This study examines the social and environmental disclosures of BHP Ltd (one of the largest Australian companies) from 1983 to 1997 to ascertain the extent and type of annual report social and environmental disclosures over the period, and whether such disclosures can be explained by the concepts of a social contract and legitimacy theory. This research is also motivated by the opportunity to compare and contrast results with those of Guthrie and Parker, in whose study the social and environmental disclosures made by BHP Ltd were also the focus of analysis. In testing the relationship between community concern for particular social and environmental issues (as measured by the extent of media attention), and BHP’s annual report disclosures on the same issues, significant positive correlations were obtained for the general themes of environment and human resources as well as for various sub‐issues within these, and other, themes. Additional testing also supported the view that management release positive social and environmental information in response to unfavourable media attention. Such results lend support to legitimation motives for a company’s social and environmental disclosures. A trend in providing greater social and environmental information in the annual report of BHP in recent years, and its variable pattern, was also evidenced.

An examination of the corporate social and environmental disclosures of BHP from 1983‐1997: A test of legitimacy theory

Prior empirical research into factors which are influential in determining the extent and nature of corporate social reporting has primarily been concerned with the impact of corporate characteristics (such as size and industry grouping) or general contextual factors (such as the social, political and economic context). Relatively little prior work has examined the internal contextual factors and their impact on reporting despite increasing emphasis in the field of practice on reporting processes and governance structures. In this study interviews were conducted with seven large multinational companies in the chemical and pharmaceutical sectors of the UK and Germany in order to identify any internal contextual factors influencing the nature and extent of reporting. The work highlights the lack of explanatory power of the existing social reporting theories. A more inclusive model of corporate social reporting is presented.

Internal organisational factors influencing corporate social and ethical reporting: Beyond current theorising

This paper documents the results of an empirical study undertaken within Australia of the relationship between the print media coverage given to various industries' environmental effects, and the levels of annual report environmental disclosures made by a sample of firms within those industries. The paper draws upon previous studies in media agenda setting theory and legitimacy theory to develop two testable hypotheses. Nine industries are reviewed across the period from 1981–1994. Drawing upon two theories, it is argued that the media can be particularly effective in driving the community's concern about the environmental performance of particular organisations (from media agenda setting theory). Where such concern is raised, organisations will respond by increasing the extent of disclosure of environmental information within the annual report (from legitimacy theory). The results indicate that for the majority of the industries studied, higher levels of media attention (as determined by a revie...

The public disclosure of environmental performance information—a dual test of media agenda setting theory and legitimacy theory

Data quality is a critical issue during the implementation of an enterprise resource planning (ERP) system. Data quality problems can have a significant impact on an organisation’s information system. Therefore, it is essential to understand data quality issues to ensure success in implementing ERP systems. This paper uses SAP as an example of an ERP system and describes a study, which explores data quality problems with existing systems, and identifies critical success factors that impact data quality. The study resulted in the development of a framework for understanding data quality issues in implementing an ERP, and application of this framework in a case study in two large Australian organisations. The findings of the study suggest that the importance of data quality needs to be widely understood in implementing an ERP, as well as providing recommendations that may be useful to practitioners.

Data quality issues in implementing an ERP

Information is the key resource of todays organizations, and therefore, quality information is critical to organizations success. Accounting information systems (AIS) in particular, requires high quality information. This chapter discusses critical success factors for data quality in accounting information systems. A model for factors that impact on data quality in AIS was proposed, and then examined in seven Australian case studies. The detailed discussion of each factor was included, and it was found that education and training, nature of AIS, and top management commitment are the most critical factors. The findings of the study would help organizations to focus on important factors to obtain better benefit from less effort. Top management, IT and accounting professionals should be able to gain the better understanding of accounting information systems data quality management from the discussion of this chapter. This chapter appears in the book, IT-Based Management: Challenges and Solutions edited by Luiz Antonio Joia. Copyright © 2003, Idea Group Inc. 701 E. Chocolate Avenue, Hershey PA 17033-1240, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com ITB8266 IDEA GROUP PUBLISHING 278 Xu, Koronios & Brown Copy right Idea Grou p Inc. Copy right Idea Grou p Inc. Copy right Idea Grou p Inc. Copy right Idea Grou p Inc. INTRODUCTION Todays organizations are operating and competing in an information age. Information has become a key resource of most organizations, economies, and societies. Indeed, an organizations basis for competition has changed from tangible products to intangible information. More and more organizations are realising that quality information is critical to their success; however, not many of them have turned this realisation into effective actions. Poor quality information can have significant social and business impacts (Strong, Lee & Wang, 1997). There is strong evidence that data quality problems are becoming incr asingly prevalent in practice (Redman, 1998; Wand & Wang, 1996). Many organizations have experienced the adverse effects of decisions based on information of inferior quality (Huang, Lee & Wang, 1999). It is likely that some data stakeholders are not satisfied in the quality of the information delivered in their organizations. In brief, information quality issues have become critical for organizations that want to perform well, obtain competitive advantage, or even just survive in the 21st century. Accounting information systems (AIS) maintain and produce the data used by organizations to plan, evaluate, and diagnose the dynamics of operations and financial circumstances (Anthony, Reese & Herrenstein, 1994). AISs data quality is concerned with detecting the presence or absence of target error classes in the accounts (Kaplan, Krishnan, Padman & Peters, 1998). Providing and assuring quality data is an objective of accounting. With the advent of AIS, the traditional focus on the input and recording of data needs to be offset with recognition that the systems themselves may affect the quality of data (Fedorowicz & Lee, 1998). Indeed, empirical evidence suggests that data quality is problematic in AIS (Johnson, Leitch, & Neter, 1981). Thus, knowledge of the critical factors that influence data quality in AIS will assist organizations to improve their accounting information systems data quality. While many AIS studies have looked at internal control and audit, data quality (DQ) studies focused on measurement of DQ outcomes. It appears that very few attempts to identify the critical success factors (CSF) for improving data quality in AIS. Thus, there is a need for research to identify the critical success factors that affect organizations AIS DQ. Information technology has changed the way in which traditional accounting systems work. There is more and more electronically captured information that needs to be processed, stored, and distributed through IT-based accounting systems. Advanced IT has dramatically increased the ability and capability of processing accounting information. At the same time, however, it also brings some issues that the traditional accounting systems have not experienced. One critical issue is the data quality in the AIS. When data quality issues have not been addressed properly, the IT advantages can sometimes create problems rather than benefit the organization. Information overload as an example; do we really need the quantity of information generated by the systems to make the right decision? Equally, in e-commence settings, can the quality of data captured online be trusted? 21 more pages are available in the full version of this document, which may be purchased using the "Add to Cart" button on the publisher's webpage: www.igi-global.com/chapter/managing-data-qualityaccounting-information/24802

Noel Brown

Papers

The public disclosure of environmental performance information—a dual test of media agenda setting theory and legitimacy theory

Data quality issues in implementing an ERP

Managing Data Quality in Accounting Information Systems