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 quasiexperimental 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.

The development of best practice recommendations by the Corporate Governance Council (CGC) of the Australian Stock Exchange in 2003 clearly linked corporate regulators' concerns about good governance to the concept of corporate social and environmental responsibility. The CGC recommended that one way to demonstrate good governance was to use the annual report to disclose information to all legitimate stakeholders. This paper reports on the quantity and categories of environmental information disclosed in the corporate annual reports of 41 Australian companies across eight industry groups covering the period 1983-2003. This time period has seen the importance of good corporate governance practice in relation to environmental protection escalate, as demonstrated by the introduction of separate environmental and sustainability reports, the advent of triple bottom line reporting, changes in environmental legislation and the occurrence of major environmental incidents. The results of this study indicate that an increasing number of companies are disclosing environmental information, and the relative volume of such information in annual reports is increasing across all categories. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Purpose – This paper aims to explore the accountants’ perspective towards their role and function as business advisors in assisting with the adoption of sustainable business practices (SBPs) in small and medium enterprises (SMEs). Design/methodology/approach – A questionnaire-based study was conducted on members from one of Australia’s leading professional accounting organizations. Findings – Key findings from this research highlighted deficiencies in the effectiveness of the accounting profession in assisting SMEs in implementing SBPs despite a desire from clients for accountants to provide this advice and a belief that accountants are best placed to do so. Further, an expectations gap is evident between the level of involvement accountants believe they should be having in assisting SMEs and the level of involvement that is currently occurring. Research limitations/implications – This finding has implications for the accounting profession, with accountants needing to examine their current business approaches in an effort to close this gap. If this does not occur, SMEs will most likely seek this much-needed advice and support from outside the profession. Originality/value – Little attention has been given to the accountant’s role in respect of sustainability from an accountant’s perspective. The findings contribute to understanding the accountant’s importance in advancing their involvement in assisting SMEs in the uptake of SBPs.

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