Use a variety of accounting theories to respond to Adams (2002) Essay

Use a variety of accounting theories to respond to Adams (2002) statement - Essay Example The corporations need to reform their reporting systems to include all aspects of operation in this era when the global economy is undergoing widespread reforms. The fundamental aim of this paper is analyzing the statement by Adam’s (2002) based on the theories of corporate social responsibility. According to the political theory, organisations have power to analyse the environment and participate in corporate social responsibility. Power is the ability to influence and control behaviour of a certain group of people. Thus, organisations have the political power to influence the aspects of social and environmental concern. Rendtorff (2009) classifies the political theory into two categories: these are corporate citizenship and corporate constitutionalism. Corporate citizenship is founded on the need of firms performing their responsibility to the environment. Corporations are referred to as legal persons (Deegan & Rankin, 1996); hence, they are considered independent individuals who ought to be responsible of their actions on the environment. Demonstrating of corporate accountability is achieved by making publications and reports discussing and analysing their contributions to the community’s wellbeing. Failure to report to the community leads to negative public view a nd lack of credibility of an organisation. The primary aim of constitutions in firms is to create and entrench power. A corporate constitution, thus, governs choices incorporated in the state law and the certificate of incorporation. According to Mahoney, Thorne, Cecil and LaGore (2013), the decision to assign powers to directors over decisions is the choice of governance structures. If directors fail to effectively and responsibly use the powers endowed to them, the community can take away the power and give it to responsible parties (Orlitzky & Swanson, 2008). The community can take away the power by cutting partnerships with them, legal actions, avoiding buying