Prior to independence in 1952, nearly 90% of the population was illiterate and only a small number of Libyans had been to university or trained as professional accountants. Since that year, a compulsory education system from primary level to university level has been established and is under development, which includes accounting education. Consistent with other systems, the country relied greatly on advisors from America, Britain and the UN to establish this system, much of which was brought from the developed world (Buzied, 1998; IBRD, 1960; Kilani, 1988; Nassr & Simon, 2004; Stanford Research Institute, 1969).
After the major changes in the economic system of Libya, the country followed some policies to move away from the colonial system of the UK and USA, and move towards recognizing and producing professional accountants by placing a strong demand on higher education and university qualifications. Similarly to other countries such as Singapore, a university degree in Libya without any further examination except only to practical experience was accredited as an acceptable qualification for professional and academic recognition (Tan Teck et al., 1994; Wijewardena & Yapa, 1998). Later on in the 1970s, more Libyan accounting offices were founded in response to the increasing number of accounting graduates from Libyan universities and graduates from abroad.
According to Nassr and Simon (2004) the accounting education system in Libya initially focused on the intermediate level (pre-university), by establishing the first School of Public Administration in 1953 as an attempt to train graduate book-keepers and clerks (Buzied, 1998). Thereafter, accounting education was launched at university level in the Faculty of Economics and Commerce at the University of Libya (currently named Garyounis University) in 1957 with the establishment of the Accountancy Department (Bakar, 1997; Buzied, 1998; Kilani, 1988). Nassr and Simon (2004) state that two levels of accounting education existed after independence which were: pre-university and university levels. The former level takes 3–4 years of study, and is divided into general baccalaureate, specialized baccalaureates, technical and vocational institutes. This level of education consists of over 30 commercial institutes, including colleges and secondary schools, in order to cope with
the growing need for accountants, secretaries and bookkeepers for both government and private sectors. For students to be qualified to study at these institutions they must pass the third part of fundamental education. The offered diploma programmes usually take three years focusing primarily on accounting subjects such as the fundamentals of accounting, cost accounting, bank accounting, principles of auditing, governmental accounting and taxation accounting. However, no professional qualifications were offered by any organisations at that time.
The first establishment of an accountancy department was in 1957 at Garyounis University in the Faculty of Economics and Commerce. This had an important impact on accounting education in Libya because it was the only faculty between 1957 and 1981 that provided accounting education at the university level (El-Firjani et al., 2014). In 1980, as a result of increasing demand for accounting services and accountants at the higher education level, a few other universities started offering accounting programmes. This increase in the number of accounting programmes in different accounting departments caused a critical shortage in the academic accounting teaching staff, which forced those institutions to recruit lecturers from different Arabic countries, particularly from Egypt, Iraq and Jordan (Nassr & Simon, 2004).
Accounting education in Libya faced a major problem; it was based on Western accounting theories which lacked validity not only because of the different nature of the economy, but also because of the Islamic nature of Libyan society, where the philosophy and institutional framework is different from those in the West in which accounting and reporting practices were practised (Nassr & Simon, 2004). It goes without saying that the Libyan accounting education system is significantly influenced by other countries’ systems, particularly those from the west, and was imported from North America and Britain during the colonial period, followed by the UN after independence. This to some extent confirms the findings of Yapa’s (2000) study that almost all developing countries have inherited their accounting education system from a colonial system under western rules.
The accounting profession in Libya is built on Islamic philosophy that is to some extent different from the one predominant in the west. For example, under the basics of the Shari’a law that promotes belief in the unity of God, the community and the environment, a form of social accountability is needed, rather than the prevailing personal accountability
in Western societies (Nassr & Simon, 2004). Consequently, accounting should represent the Islamic belief of full disclosure of information in order to achieve the objective of state accountability, rather than focusing on what can be disclosed and cannot be disclosed being the result of other political issues (Ahmed & Karim, 1995; Baydoun & Willett, 2000). Baydoun and Willett’s study (2000) illustrated a comparison between the Islamic system and Western accounting (see Figure 2-2). For a long period of time the State was the ultimate user of accounting reports primarily for taxation purposes, and required companies to serve the interests of the socialist state. Consequently, the accounting profession had to focus on giving priority to complying with the state’s national economic strategy, and imposing a robust focus on the implementation of the regulations, laws, and the state’s economic policies, when annual reports were prepared and audited and accounting services were provided. It could be argued that since the Libyan economic system differs significantly from that economies in the Western world, teaching the accounting curriculum introduced from the Western world is not desirable, because the Western accounting curriculum needs to be modified and adapted to fit the accounting reality in Libya rather than being taught mechanically (Nassr & Simon, 2004).
Figure 2-2 The differences in Islamic and Western accounting systems
Characteristics Western financial accounting system Islamic corporate reports
Philosphical Viewpoint Principles Economic rationalism Secular Individualistic Profit maximization Survival of fittest Process Unity of God Religious Communal Reasonable profit Equity Environment Criteria Based upon modern commercial law –
permissive rather than ethical:
Based upon ethical law orginating on the Qur’an: (Islamic Law, As- Sunnah)
Limmited disclosure (provision of information subject to public interest)
Full disclosure (to satisfy any reasonable demand for information in accordance with the Shari’a)
Personal accountability
(focus on individuals who control resources)
Public accountability (focus on the community who participate in exploiting resources)
Source: Adapted from Baydoun and Willett (2000, p. 82)