It is evident that there were many factors that have affected the development of accounting systems and accounting operations in developing states. These factors might be divided into:
The impact of colonization, globalization and Multi-National Corporations ( MNCs )
Such as local Torahs, revenue enhancement, accounting educational systems, and accounting as a profession, besides other political, cultural, and economical factors.
Arabic states in general, and peculiarly Libya, have encountered about similar sorts of factors, which have impacted the profession of accounting during the pre-and post-independence epochs. Sing the development of accounting before Libyan independency, it is apparent that it was under the influence of Turkish, Italian, British, and Gallic business, and each business impacted upon the constitution and development of most current applied accounting systems in Libya ( 2 ) .
Furthermore, after independency, external scrutinizing experience was the chief beginning of impact on the development and profession of accounting, including international aid from the United Nations, and the reaching of international companies to work in Libyan market. However, the newly-legislated Torahs and ordinances, and the freshly implemented educational and professional accounting systems exerted an internal ( Libyan ) influence on accounting ( 2 ) .
Since there was a dearth of resources for most of the history of modern Libya, there was a demand to measure the external factors and their effects on accounting via historical audit for some political and economical conditions, which led to the development of Libyan accounting ( 2 ) .
The internal factors were studied via chronological historical reappraisal of some Torahs such as jurisprudence revenue enhancement, commercial jurisprudence, and the constitution of educational and professional accounting in Libya.
Harmonizing to the current accounting environment in Libya, it is apparent that the local accounting system is chiefly imported from developed states, such as the UK and USA ; furthermore, there was no grounds of any alteration of these systems to be convenient to the Libyan environment. British and American accounting systems were identified by being directed towards external auditing, and foreign fiscal studies, which is the instance in Libya ( 5, 8 ) . There were no accounting rules or scrutinizing criterions until the present, besides which there is no codification of behavior for comptrollers. Since most of companies working in Libyan markets are national in beginning, they are supposed to accomplish economic and societal ends, and contribute to the overall developmental rate, so it is polar to set up informing accounting systems to measure their public presentation, nevertheless, available accounting informations in these companies lack the quality of accounting information criterions, for illustration the ability for comparison ; it is apparent that fiscal lists are limited to pure fiscal information.
In 1973 the first international commission for the coordination of the accounting and scrutinizing profession, the International Accounting Standards Committee, was established in Sydney, for the coordination of the accounting and scrutinizing professions. The commission issued 39 conventions on international criterions until the terminal of 2001, therefore taking to develop and consolidate the accounting profession within a incorporate international range ( 2, 7, and 12 ) . A figure of provinces developed and issued local Accounting Standards, whereas some provinces adopted the guidelines of the International Accounting Standards Committee without any changes or amendments, at the clip some other provinces recourse to those criterions, as in the instances of Saudi Arabia and Egypt ( 1,3 ) . The General People ‘s Committee for Economy, Trade and Investment, which is oversing the constitution of the stock market, participated in session 35 of the Tripoli International Fair, being represented by workers of the market, and a particular wing was organized in order to specify Libyan Stock Market importance, to increase the consciousness of investors about the covering attacks in markets, and to direct them towards the optimal investing of their nest eggs ( 4, 6 ) .
The working group of the market was organized harmonizing to single specialisation ; a 2nd symposium entitled ‘Future Vision towards Investment ‘ was held during the period of session 35 of the Tripoli International Fair. It was besides attended by a figure of economic experts and specializers interested in economic and investing personal businesss, in a figure of treatment subjects and subjects aimed at the definition of securities market, the trading motion, and the function of agents in exciting trading and modulating the motion of the market, and besides reacting to all the inquiries which could open the manner for investors, whether domestic or foreign, in securities, because it is the channel granted transparence and credibleness in order to optimise the investing in successful companies.
The stock market has taken the necessary agreements sing some registered companies and Bankss, Figure 1.
The first stage of the foundation witnessed keeping several intensive meetings with the relevant parties in market activity and the hiring of local and foreign experts in this country ( 9 ) .
Figure 1, companies and Bankss at Libyan Stock Market
United Insurance Company
National Company for flour Millss & A ; fresh fish
Libyan Insurance Company
Sahara insurance company.
Libyan stock market company
National Cement Company
Trade and development bank.
Alsary trade and investing bank
Tripoli National Bank
Suk Eljuma National Bank
Hay Andalus National Bank
In June 3, ( 2006 ) the General People ‘s Committee issued Resolution Number 134, to set up a Libyan Stock Market and publishing its legislative act. Consequently, the Secretary General People ‘s Committee for Economy, Trade and Investment issued Decision Number 244 ( 2006 ) naming Suliman Alshahomy as the General Manager of the Libyan Stock Market ( 9 ) .
The Secretary of the General People ‘s Committee for Economy, Trade and Investment issued resolution Number 332 ( 2006 ) , sing the designation of fees and parts of members of the Libyan Stock Market. Since the issue of these declarations, the assigned director established the stock market draw In parallel with mechanisms that the market should follow after the constitution through external visits to Arab states, he studied Amman, Dubai, Cairo, and Alexandria Stock Exchanges, to stand on their experiences on topographic point ( 9 ) .
The General People ‘s Committee has issued the Decision No. ( 436 ) for the twelvemonth 2008, sing the new legislative act for the Libyan Stock Market, it has been raised market capitalisation to 50,000,000 L.D. , Underwritten by the Fund for Social and Economic Development in full and may be seting portion of them for subscription by local and international companies.
Problem of the survey:
In Libya, the pattern of accounting scrutinizing began in the fiftiess with the Law Number 31 ( 1955 ) sing the building of the Department of Accounting by the province. The find of oil was the most of import economic incident which attracted a figure of the investors in the early 1960ss. The accounting and scrutinizing offices were directed by aliens, because of the scarceness of qualified citizens to pattern the scrutinizing profession ( 2 ) .
Since the Libyan revolution in 1969, the nomination of hearers has been assigned to the Ministry of the Treasury. There have been endeavours to form accounting and auditing, in add-on to legal statute law, the Law Number 116 ( 1973 ) refering to the accounting and scrutinizing profession led to the first mob council being formed in 1975 ( 5, 8 ) .
In 1975 Law Number 79 for the twelvemonth 1975 sing the Department of Accounts was passed for scrutinizing the public constitutions and corporations in add-on to public sector companies.
The above mentioned Torahs were limited to forming the administrative and legal points for practising the accounting and scrutinizing professions in Libya.
Due to the importance of the topic, and deficiency of local accounting rules criterions to be used as a benchmark for Libyan comptrollers and hearers, a squad of research workers conducted an extended survey for stock list and rating of the accounting rules in Libya for the National Corporation for Scientific Research, under the supervising of the Committee of Science and Economics Committee, which is considered the first test to execute an stock list of the accounting rules applied in Libya ( 2 ) .
The survey revealed a group of consequences summarized as follows:
a-? A field distinction between similar companies in using the accounting rules, a affair which lead to distinction in the accounting informations published, in add-on to the trouble of comparing informations.
a-? A field difference between similar companies refering to the footing and methods of accounting processs, which is attributable to the absence of an accounting general model and approved accounting criterions for the accounting processs and methods in Libya, a affair which increased the trouble of comparing similar companies.
a-? Most companies violate the basic constituents of the aim of fiscal studies, which leads to minimising the public-service corporation and importance of published accounting informations, which earnestly inhibits doing informed economic determinations.
The undermentioned recommendations resulted from the survey:
Upgrade the development of accounting degrees through extended instruction of accounting in universities, and higher establishments, to construct a cohort of competent comptrollers.
Forming an official organisation entrusted with the issue of rules, footing, and processs, to form accounting and scrutinizing professions, in add-on to work out accounting proficient rules jobs, which might confront comptrollers in their pattern, on status that it should be subordinated to the comptrollers and hearers council to vouch its independency and subjectiveness in doing determinations.
Widen the topics of survey to accounting rules and different applications guided by the consequences arrived by this.
In add-on to above, the General People ‘s Committee of Financial Audit will postulate fiscal lists for Public companies within the fortunes of the absence of local Accounting Standards, a affair which led to the determination of accounting interventions that must be followed, being personally undertaken by the comptrollers and hearers within the General People ‘s Committee for Financial Audit.
Based on the above, the job of survey is chiefly related to the lack of applicable accounting criterions in the local environment at nowadays. The research inquiries which arise are:
Q1- To measure the figure of companies that have implemented IFRS in their fiscal processs in Libya.
Q2- To place the implicit in factors that lead to the usage of IFRS in Libyan companies. This involves three subdivisions:
2-1 Explore the conformity of these companies with IRRS.
2-2 Detect ordinances, which have been legislated to actuate companies to utilize IFRS.
2-3 place the conditions in which IFRS should be used.
Q3- Identify the impact of the usage of IFRS on companies ‘ reported net incomes.
As mentioned above in the research inquiries, there is no proper execution of IAS in Libya, in this chapter a background on Libyan accounting pattern, ordinance and market finance will be provided, moreover it will affect a reappraisal of the academic literature on accounting in Libya, which is expected to be little, so in this instance I will look into the debut of IFRS in this chapter by other similar states. A elaborate history of IAS in Libya was hard to obtain, so it was proposed to analyze similar states, to back up and polish research inquiries. Which are expected to be Arabic states such as Jordan, Egypt in the Middle East ( 10, 11, and 13 ) .
Importance of the survey:
To place the extent of suitableness of conformity with the international accounting criterions in the local environment of Libya.
To raise involvement in the constitution of regulative organic structures in accounting and auditing, to standardise and codify accounting patterns in the public companies in Libya.
It is a measure to set up accounting criterions that suit the local environment in Libya, which is one of major oil and gas bring forthing states, and a strategically critical portion of North Africa and the Mediterranean, and an of import factor in greater Africa and the Middle East.
Purpose of the survey:
The survey aims to exemplify the environmental fluctuation in the development of accounting, and to explicate the function and engagement of the regional and international organisations in set uping International Accounting Standards ( IASs ) , and the extent of compatibility with those criterions in different states.
In add-on to this, the survey purposes ( from a practical point of position ) to prove the viability of IASs to be applied in Libya by utilizing the sentiments and expertness of accounting and scrutinizing practicians.
Premises of the survey:
The survey has been based on the undermentioned premises ; it is non necessary to follow with all IASs in Libya without amendment or change, and it is all right to modify criterions to be in harmoniousness with the local environmental fluctuation in Libya.
( Relevant to favourite intervention ) :
In order to prove the premises, the undermentioned subdivision premises were devised:
There is no understanding between the accounting and auditing patterns for taking the favorite accounting intervention.
The alternate premise, that there is an understanding between the accounting and scrutinizing practicians in Libya to take the favorite accounting intervention.
Methodology of the survey:
The methodological analysis of the survey is based upon three manners:
1- The library survey manner: the research worker will depend upon past books and surveies, in add-on to the specialised classs in this field to obtain the information which covers the theoretical facets of the research.
2- The scientific survey manner: the research worker will depend on questionnaire signifier as a agency to roll up informations and information, which serves the scientific intent of the survey.
3- Interviews with Numberss of employees, in different recognized companies in Libya, with particular inquiries which answers the research inquiries. This portion of methodological analysis will concentrate on the extent of usage of IFRS in the Libyan institutes, regulative organic structures, and will look into how many companies use the IAS, therefore will research grounds of these companies to take IFRS, and their attack to implement these criterions.
Limits and range of the survey:
Hearers of the section of production at the General People ‘s Committee for Financial Audit, which is the responsible authorization of Auditing and enfranchisement of the fiscal lists for the Public Industrial Companies in Libya.
Fiscal directors at Public Companies, as most of International Accounting Standards manage companies ‘ accounting instances that are relevant to public Libyan Companies and corporations ( 5 ) .
The clip boundary will be chosen for practical survey, harmonizing to modern issues and boundaries and amendments for international accounting criterions, in order to get down the survey and get down distribution of the questionnaire signifiers.
Contentss of the survey:
The survey contains a general model for survey and four chapters.
The first chapter handles the consequence of environmental factors in the development of accounting during the survey of the effects of the different environmental alterations ( economic sciences, societal and political etc. ) in the development of accounting. In add-on to that, the chapter will discourse the construct and elements of International Accounting Standards, and the fiscal inside informations of companies registered at the Libyan Stock Market.
The 2nd chapter specifies the attempts and engagement of international and regional organisations in set uping International Accounting Standards.
Detailed appraisal will be applied to this portion of the survey of international accounting through the survey history of its development, manner of work, and aims. In this chapter, accounting professions, the importance of these criterions in accomplishing these aims, and the current usage of IFRS will be studied.
The 3rd chapter dressed ores on analyzing the viability of International Accounting Standards being implemented in the different states, and considers the conceptual theoretical account of the developed, industrial universe and North African Arab states in this.
The concluding chapter dressed ores on the extent of the viability of using IASs in Libya, through resort to seeking treatments with accounting and auditing houses ‘ practicians included in the practical survey, and a group of consequences and recommendations are presented at the terminal of this survey.