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Profit and organisational legitimacy in an emerging market

Prasad, Acklesh, Green, Peter, & Heales, Jon (2009) Profit and organisational legitimacy in an emerging market. In Proceedings of the 2009 Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Accounting and Finance Association of Australia and New Zealand, Adelaide, SA, pp. 1-25.

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      Abstract

      While there is common acknowledgement that the main aim of organisations is to maximise shareholder wealth, firms also have the obligation to manage the needs of a broader group of stakeholders as these firms are a product of social creation. In this study, we test the notion that the concept, profit, is fundamental to society’s perception of the firm in an emerging market, and the need for a firm to legitimise a level of profit. We evaluate the relationship between the readability of various components of corporate annual reports and the level of profit, and we also take into account the nature of disclosure (mandatory and non-mandatory), the size of the firm and the nature of setup (public enterprises and publicly listed companies). Our findings suggest that, as with developed markets, in emerging markets profit is indeed an important determinant of the nature of operations of a firm, and that firms consider readability of their disclosures in attempting to legitimise a level of profit.

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      ID Code: 50812
      Item Type: Conference Paper
      Keywords: Legitimacy Theory, Mandatory Disclosures, Non-Mandatory Disclosures, Profit, Public Enterprises, Publicly Listed Companies
      Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
      Divisions: Current > QUT Faculties and Divisions > QUT Business School
      Current > Schools > School of Accountancy
      Copyright Owner: Copyright 2009 [please consult the author]
      Deposited On: 08 Jun 2012 10:43
      Last Modified: 29 Jun 2012 21:43

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