The motivation for choosing this topic and Libya as a case study stems from the
fact that in 1992 Libya has changed its economic policy. In 1997, foreign investors were
allowed to invest in the country by entering into partnership with Libyan enterprises
and private ownership along with public ownership. In addition, Libya witnessed the
emergence of the LSM which requires that all public and private companies register in
the LSM in order to be listed. The LSM’s law and the Banking Law concerning
corporate and bank activities have adopted IASs in the national accounting
environment. Furthermore, the LAAA has put in place the first draft of Libyan
Accounting Standards which are based on IASs.
Although it is evident that there is substantial literature regarding accounting
regulation within developing countries, this paper takes the view that the pace and
magnitude of change has increased significantly in recent years. Thus the key
literature on the subject of corporate accounting regulation in developing countries is,
despite its extensive and broad scope, far from being conclusive and some studies
are based on anecdotal evidence. This paper’s contribution to the debate seems to be all
the more pertinent. This paper suggests that there are gaps within developing
countries regarding research on accounting regulation such as the link between the
implementation process, economic and political readiness, staff training preparedness,
costs and benefits of clear and coherent accounting regulation. In addition, there are
opposing views as to the best process or method to adopt for effective development and
implementation of accounting regulation.