The Libyan Accounting Profession

Authors: Bubaker F. Shareia

Abstract:

The aim of this paper is to trace the historical development of the accounting profession in Libya, in order to identify challenges facing the profession as the country moves from a closed to emerging economy. The study is based on a literature review and archival research. Accounting information has a vital role to play in the achievement of economic goals in developing and emerging economies, but a well qualified accounting profession is required. In the context of institutional instability and unique cultural factors, the accounting profession in Libya faces educational and legal challenges if it is to achieve its potential in assisting the country to reach its economic goals. This study focuses on one country, which does limit its generalisability. However, it also suggests fruitful research areas in considering the impact and challenge of historic factors on the accounting profession in emerging economies. Centrally planned economies require a body of well trained professional accountants if they are to emerge onto the global economic arena. Studies on the accounting profession have focused primarily on those in developed economies, where the need for meaningful accounting information for decision making is taken for granted and there is a well trained, professional workforce. This study of the profession in an emerging economy highlights the efforts that will be needed to ensure the contribution of the profession to the economic wellbeing of other emerging economies.

Keywords: Accounting profession, developing countries, culture, planned economy, emerging economy.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1097038

References:

[1] Abohbil, A. (2003). Oil revenues and development Libyan Economic Forum and The Aversion of Oil Revenues (Future Vision), Sirt, Libya Libyan Economic Forum.
[2] Agnaia, A. A. (1996). "Assessment of management training needs and selection for training: the case of Libyan companies." International Journal of Manpower 17(3): 31-51.
[3] Agnaia, A. A. (1997). "Management Training and Development within Its Environment: The Case of Libyan Industrial Companies." Journal of European Industrial Training 21(3): 117-123.
[4] Akyüz, Y. and Cornford, A. (1999), "Capital flows to developing countries and the reform of the international financial system", United Nations Conference on Trade and Development (UNCTAD) Discussion Paper No. 143, November, available at http://www.unctad.org/en/ docs/dp_143.en.pdf (accessed 7 May 2010).
[5] Alam, M. (1997), "Budgetary process in uncertain contexts: a study of state owned enterprises in Bangladesh", Management Accounting Research, Vol. 8, No. 2, pp. 147 - 167.
[6] Alam, M. and Lawrence, S. (1994), "Institutional aspects of budgetary processes: a case study in a developoing country", Asian Review of Accounting, Vol. 2, No. 1, pp. 45 - 62.
[7] Altarhoni, A. (2003). "The Factors of Employment in Industrial sector." Journal of Economic Research 14(1): 137-176.
[8] Altinner, M. (1988). "The Authority and the Preparation of Research in Arabic World." Alfikr Alarabi 53.
[9] Annisette, M. (1999), "Importing accounting: the case of Trinidad and Tobago", Accounting, Business & Financial History, vol. 9, pp. 103 - 133.
[10] Annisette, M. (2000), "Imperialism and the professions: the education and certification of accountants in Trinidad and Tobago", Accounting, Organizations and Society, Vol. 25, pp. 631 - 659.
[11] Annisette, M. (2004), "The true nature of the World Bank", Critical Perspectives on Accounting, Vol. 15, pp. 303 - 323.
[12] Arnold, P. (2005). "Disciplining domestic regulation: the World Trade Organization and the market for professional services", Accounting, Organizations and Society, Vol. 31, No. 4, pp. 299 - 330.
[13] Arnold, P. and Sikka, P. (2001). "Globalization and the state-profession relationship: the case of the Bank of Credit and Commerce International", Accounting, Organizations and Society, Vol. 26, pp. 475 - 499.
[14] Badran, A. (1985). The role of Higher Education and Research Centers in prepare the Arabian People to Scientific Prove. Beirut, Derassat Alwahda Alarabia.
[15] Bait El-Mal, A. (2003). "Evaluation of Goals and Development Plan in Libya." Journal of Economic Research 14(1): 208-243.
[16] Bait El-Mal, M., C. H. Smith, et al. (1973). "The Development of Accounting in Libya." The International Journal of Accounting, Education and Research 8(2): 83-101.
[17] Bait El-Mal, M. A. (1990a). "The Significance and Advancement of Accounting Information for Economic Development." Journal of Economic Research 2(2): 25-36.
[18] Bait El-Mal, M. A. (1990b). "Survey and Evaluation of the Accounting Principles Applied in Libya." Journal of Economic Research, National Academy of Scientific Research: The Economic Research Centre, Benghazi 2(1): 14-26.
[19] Bakar, M. (1998). Accounting and the Developments Economic Development of Oil and Gas in Libya. Department of Accounting. Dundee, University of Dundee, Scotland. Unpublished PhD Thesis.
[20] Bakar, M. and A. Russell (2003). The development of Accounting Education and Practice in Libya. Research in Accounting in Emerging Economies. R. S. O. Wallace, J. M. Samuels, R. J. Briston and S. M. Saudagaran. Oxford, Elsevier Science 5: 197-236.
[21] Baydoun, N. and R. Willett (1995). "Cultural Relevance of Western Accounting Systems to Developing Countries " Abacus 31(1): 67- 92.
[22] Bengharbia, S. (1989). "Auditing and profession ethics in Libya." Journal of Economic Research, National Institute for Scientific Research: The Economic Research Center, Benghazi 1(1): 117-126. ***
[23] Bloom, R., J. Fuglister, et al. (1998). "The State of Accounting in Armenia: A Case " The International Journal of Accounting 33(5): 633- 654.
[24] Briston, R. J. (1990). Accounting in Developing Countries: Indonesia and the Solomon Islands as Case Studies for Regional Cooperation. Research in Third World Accounting. R. S. O. Wallace, J. M. Samuels and R. J. Briston. London, JAI 1: 195-216.
[25] Caramis, C. v. (2002). "The interplay between professional groups, the state and supranational agents: Pax Americana in the age of 'globalisation'", Accounting, Organizations & Society, Vol. 27, pp. 379 - 408.`
[26] Central Bank of Libya (1971). Economic Bulletin. Tripoli, Central Bank of Libya.
[27] Central Bank of Libya (1977). Economic Bulletin. Tripoli, Central Bank of Libya.
[28] Central Bank of Libya. (2006). "Articles of association of the Libyan financial securities market." 56/2006, from http://www.cbl.gov.ly/en/ search/index.php?textfield=stock+market&Submit=Search&charset=cha rset%3Diso-8859-1.
[29] Chua, W. F. and Poullaos, C. (1998), "the dynamics of 'closure' amidst the construction of market, profession, empire and nationhood: a historical analysis of an Australian accounting association, 1886 - 1903", Accounting, Organizations and Society, Vol. 23, pp. 155 - 187.
[30] Cooper, D. J., Greenwood, R., Hinings, B. and Brown, J. L. (1998), "Globalization and nationalism in a multinational accounting firm: the case of opening markets in Eastern Europe", Accounting, Organizations and Society, vol. 23, Nos 5/6, pp. 531 - 548.
[31] Deloitte. (2010). "Service offerings across the Middle East." Retrieved 3 February 2010, from http://www.deloitte.com/view/en_LB/ib/ services/index.htm
[32] Derwish, B. M. A. and A. A. Elghli (2006). "Effecting Factors in Developing Accountancy in Libya." Dirasat in Economics and Business 25: 1-11.
[33] El-Sharif, Y. (1978). An empirical investigation of Libyan professional accounting services. Department of Accounting. Columbia, University of Missouri. Unpublished PhD thesis.
[34] El-Sharif, Y. (1980). "An Empirical Investigation of Libyan Professional Accounting Services " Dirasat in Economics and Business XVI(1,2): 3- 11.
[35] El-Sharif, Y. (1981). "The Influence of Legal Environment Upon Accounting in Libya." Dirasat in Economics and Business 8(2): 36-44.
[36] Ernst and Young. (2010). "About us. Libya." Retrieved 3 February 2010, from http:/www.ey.com/EM/en/About-us/Libya.
[37] Hofstede, G. (1984). Culture's consequences : international differences in work-related values Beverly Hills Sage.
[38] Hopper, T., Tsamenyi, M., Uddin, S. and Wickramasinghe, D. (2009), "Management accounting in less developed countries: what is known and needs knowing", Accounting, Auditing & Accountability Journal, Vol. 22, No. 3, pp. 469 - 514.
[39] Hoque, Z. and Hopper, T. (1994), "Rationality, accounting and politics: a case study of management control in a Bangladeshi jute mill", Management Accounting Research, Vol. 5, No. 5, pp. 5 - 30.
[40] House, R., Javidan, M., Hanges, P. and Dorfman, P. (2002), "Understanding cultures and implicit leadership theories across the globe: an introduction to project GLOBE", Journal of World Business, Vol. 37, No. 1, pp. 3 - 10.
[41] Irvine, H. (2008). "The global institutionalization of financial reporting: The case of the United Arab Emirates." Accounting Forum 32(2): 125- 142.
[42] Kabaskar, H. and Bodur, M. (2002), "Arabic cluster: a bridge between East and West", Journal of World Business, Vol. 37, No. 1, pp. 40 - 54.
[43] Kilani, A. K. (1988). The Evolution and Status of Accounting in Libya. Department of Accounting. Hull, University of Hull. Unpublished PhD thesis.
[44] Kilani, A. K. (1990). "The Link Between Accounting and Economic and Social Development Needs in Developing Countries." Journal of Economic Research, National Academy of Scientific Research: The Economic Research Centre, Benghazi 2(1): 67-86.
[45] Kilani, A. K. (1998). "The Current and The Future of Financial Performance Reports in Libya." Journal of Economic Research, National Academy of Scientific Research: The economic Research Centre, Benghazi 9(1/2): 203-231.
[46] Knapp, W. (1977). North West Africa: A Political And Economic Survey. Oxford, Oxford University Press.
[47] KPMG. (2010). "Global." Retrieved 3 February 2010, from http://www.kpmg.com/global/en/Pages/default.aspx.
[48] Libya State (1967). Financial System Law Act, Libya.
[49] Libya State (1970). The Commercial Act. No. 65, Libya.
[50] Libya State (1973). The Libyan Income Tax Law. 64/73.
[51] Libya State (1974). The Official Gazette, Law No.116 of 1973 to Organise the Accounting Profession in Libya.: 251-268.
[52] Libya State (2004). The Libyan Income Tax Law Act. No. 11, Libya. 11/2004.
[53] Libya State. (2006). "Central Bank of Libya " Retrieved 17/03/2007, 2007, from http://www.cbl.gov.ly/en/search/index.php?textfield=stock+ market&Submit=Search&charset=charset%3Diso-8859-1.
[54] Marwata, M. A. (2006). "The interaction amongst reform drivers in governmental accounting change: The case of Indonesian local Government " Journal of Accounting & Organizational Change 2(2): 144-163.
[55] Meyer, J. W. (2000). "Globalization: sources and effects on national states and societies", International Sociology, Vol. 15, No. 2, pp. 233 - 248.
[56] Mir, M. Z. and A. S. Rahaman (2005). "The adoption of international accounting standards in Bangladesh, An exploration of rationale and process " Accounting, Auditing & Accountability Journal 18(6): 816- 841.
[57] Mirghani, M. (1982). "Framework for a Linkage Between Microaccounting and Macroaccounting for the Purposes of Development Planning in Developing Countries." International Journal of Accounting. 18(1): 57-68.
[58] Mohidin, A. (1972). Development and Economic Planning. Beirut, Dar Alnahtha Alarabia.
[59] Ndzinge, S. and R. J. Briston (1999). Accounting and Economic Development. Accounting and Development: A special Case for Africa, Research in Accounting in Emerging Economies R. S. O. Wallace, J. M. Samuels, R. J. Briston and S. M. Saudagaran. Stamford, JAI Press. Supplement 1: 29-42.
[60] Needles, B. E. (1976), "Implementing a framework for the international transfer of accounting technology", The International Journal of Accounting, Vol. 12, No. 1, pp. 45 - 62.
[61] Neu D, Gomez E O, et al. (2006). "Informing' technologies and the World Bank." Accounting, Organizations and Society 31(7): 635-662.
[62] Neu D and Ocampo E (2007). "Doing Missionary Work: The World Bank and the Diffusion of Financial Practices." Critical Perspectives on Accounting 18(3): 363-389.
[63] Okike, E. (2004). "Management of crisis, The response of the auditing profession in Nigeria to the challenge to its legitimacy " Accounting, Auditing & Accountability Journal 17(5): 705-730
[64] Olowe-Okere, E. (1999), "Management of change in the Nigerian government financial control system: the military factor", Research in Accounting in Emerging Economies, vol. 1, pp. 307 - 331.
[65] Organization for Economic Co-operation and Development (OECD). (2008). "Libya." Retrieved 3 February 2010, from http://www.oecd.org/ dataoecd/12/52/40578167.pdf.
[66] Poullaos, C. (1999), "Introduction: from the East - stories about accountants in Asia", Accounting, Auditing & Accountability Journal, Vol. 12, No. 3, pp. 274 - 285.
[67] Poullaos, C. (2009), "Profession, race and empire: keeping the centre pure, 1921 - 1927", Accounting, Auditing & Accountability Journal, Vol. 22, No. 3, pp. 429 - 468.
[68] PriceWaterhouse Coopers. (2010). "Libya." Retrieved 3 February 2010, from http://www.pwc.com/m1/en/countries/libya.jhtml.
[69] Seidler, L. J. (1967). The function of accounting in economic development: Turkey as a case study. New York, Praeger.
[70] Selway, M. (2000). "Over the hump." Accountancy 125(1280): 68-69.
[71] Senarath Yapa, P. W. (1999), "Professional accounting environment in Brunei", Accounting, Auditing & Accountability Journal, Vol. 12, No. 3, pp. 328 - 339.
[72] Shareia, B. (1994). Responsibility of the External Auditor in Libya, An Empirical Study Accounting Benghazi, University of Garyounis, Libya. Unpublished Masters thesis: 126.
[73] Shareia, B. (2005). The Role and Objectives of Accounting Systems in Libya: The Status of the Industry Secretariat. Accounting, Commerce & Finance: The Islamic Perspective Conference, Jakarta, Trisakti University.
[74] Shareia, B. and F. Buferna (2001). The Effect of Changing in Tax legislation upon Government Revenues and Private Sector Activities Taxation System in Libya: Evaluation & Improvement Conference Tripoli; Libya University of Garyounis.
[75] Shareia, B. and H. Irvine (2008). The use of accounting information in the economy of Libya: an historical approach. The 12th World Congress of Accounting Historians, Istanbul- Turkey.
[76] Shareia, B. and H. Irvine (2009). Accounting Information Systems in a Centrally Planned Economy: The Case of the General Company for Pipelines (GCP). The 4th Edition of the Annual Conference Accounting and Management Information Systems, Bucharest – Romania.
[77] Silaen, P. and C. Smark (2006). "The "Culture System" in Dutch Indonesia 1830-1870: How Rawls's Original Position Ethics were Violated " The Business Review, Cambridge 6(2): 45-50.
[78] Suddaby, R., Cooper, D. J. and Greenwood, R. (2007). "Transnational regulation of professional services: governance dynamics of field level organizational change", Accounting, Organizations & Society, Vol. 32, pp. 333 - 362.
[79] Sukoharsono, E. G. and M. Gaffikin (1993). "The Genesis of Accounting in Indonesia: The Dutch Colonialism in Early 17th Century' " The Indonesian Journal of Accounting and Business Society 1(1): 4-26.
[80] Susela, S. D. (1999), "'Interests' and accounting standard setting in Malaysia", Accounting, Auditing & Accountability Journal, Vol. 12, No. 3, pp. 358 - 387.
[81] The Economist Intelligence Unit (2003). Country Profile -Libya. London, The Economist Intelligence Unit.
[82] The Library of Congress (1987), "Country Studies. Islam in Revolutionary Libya", available at http://lcweb2.loc.gov/cgibin/ query/r?frd/cstdy:@field(DOCID+ly0066) (accessed 7 May 2010).
[83] The World Bank. (2006). "Libya: development prospects and challenges " Retrieved 3 February 2010, from http://info.worldbank.org/etools/ BSPAN/PresentationView.asp?PID=1848&ELD=869.
[84] The World Bank. (2010a). "Libya at a glance” Retrieved 3 February 2010, from http://web.worldbank.org/WBSITE/EXTERNAL/ COUNTRIES/MENAEXT/LIBYAEXTN/O,,menuPK:410809~pagePK: 141132~piPK:141109~theSitePK:410780,00.html.
[85] The World Bank (2010b), "World Development Indicators Database". 19 April, available at http://siteresources.worldbank.org/ DATASTATISTICS/Resources/GNIPC.pdf (accessed 7 May 2010).
[86] Udin, S. and Hopper, T. (2003), "Accounting for privatisation in Bangladesh: testing World Bank claims", Critical Perspectives on Accounting, Vol. 14, No. 7, pp. 739 - 774.
[87] Wickramasinghe, D. and Hopper, T. (2005), "A cultural political economy of management accounting controls: a case study of a textile mill in a traditional Sinhalese village", Critical Perspectives on Accounting, Vol. 16, No. 4, pp. 473 - 503. and Hopper.