History Accounting is considered to be socially constructed when there is a relationship between the social needs and the changes

to the form of accounting to meet those needs. Accounting is considered to be socially constructing when the outputs of the accounting process have an impact on the way society operates. There outputs may be the various accounting reports and what is measured in those reports. Effcicent market There are three forms of the efficient market hypothesis The "Weak" form asserts that all past market prices and data are fully reflected in securities prices. In other words, technical analysis is of no use. The "Semistrong" form asserts that all publicly available information is fully reflected in securities prices. In other words, fundamental analysis is of no use. If the market is semi-strong form efficient, then stock price reacts so fast to all public information that no investor can earn an above normal return by acting on this type of information. The "Strong" form asserts that all information is fully reflected in securities prices. In other words, even insider information is of no use A. The Efficient capital market vs. the accounting method If accounting results are released by an organization, and these results were already anticipated by the market (e.g. interim announcement), then the expectation is that the prices of security will not react to the release of the accounting results. Consistent with traditional finance theory, the price of a security is determined on the

basis of belief about The Present Value of Future Cash Flows pertaining to that security and when these belief changes (as a result ot particular information becoming available) the expectation is that the securitys price will also change. Because share prices are expected to reflect information from various sources (as the information relates to predicting future cashflow), that was a view that Management cannot manipulate share prices by changing accounting methods in an opportunistic manner. B. The choices of manager under the efficient capital market Because there are many sources of data used by the capital market, if managers make less than truthful disclosures, which are not corroborated or contradicts other available information, then, assuming that the market is efficient, the market will question the integrity of the managers. Consequently the market will tend to pay less attention to subsequent accounting disclosures made by such managers. While supportive of EMH, the literature was unable to explain why particular accounting methods might have been selected in the first place. For example, if an entity elected to switch its inventory cost flow assumptions and this led to an increase in reported income, then the market was assumed to be able to see through this change, and to the extent that there were no apparent cash flow implications, there would be no share price reaction. Hence, if the particular accounting method had no direct taxation implications, there was an inability to explain why one method of accounting was selected in preference to another.

Sustainable development defined as development that meets the needs of the present world without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development, 1987) Legitimacy Theory and social contract disclosures linked to providing evidence that entity is complying with the expectations of society

 Stakeholder Theory disclosure depends on expectations of powerful stakeholders if the managerial perspective of stakeholder theory is embraced Accountability Model an acceptance of a responsibility to report Institutional Theory organisations will adopt particular practices because of institutional pressures Positive Accounting Theory disclosure depends on positive wealth implications consider submission of the Business Council of Australia Consider the views of Milton Friedmanreporting is not about responsibilities; rather, it is about enhancing business profitability A broader view of business responsibilities would accept that regardless of the impacts of profitability, stakeholders have a right to know about the social and environmental implications of an organisation Friedman rejected the view that corporate managers have any moral obligations responsibility to increase profits as long as stays within the rules this view often held by the mediaapplauds profitable organisations Alternative view organisations earn their right to operate in the community artificial entities that society chooses to create organisations do not have an inherent right to resources consequently accountable to society for how it operates societal expectations may exceed profitability