Libya’s IAS/IFRS Adoption and Accounting Quality: What Lessons from the European Union Experience

Najeb Masoud

Abstract


This study provides a review of the literature on adoption of IAS/IFRS in Libya, the time the IFRS standards decision is made in EU countries and the time IAS/IFRS adoption becomes undertaking in Libyan economy. The adoption of IAS/IFRS in Europe on the quality of financial reporting is an example of accounting standardisation among countries with different institutional frameworks and implementation rules. Impacts of this adoption in Libya will gain many benefit include the improve quality of financial reporting, less earnings management, more comparability, and provide more reliable, accurate, transparency, and high relevance for stock price determination of financial accounting information. These findings could be fruitful and helpful for outside users of accounting reports and also for regulators and legislators in their attempts to constrain the incidence of earnings accounting practises and to enhance the quality of accounting information. To explore the relevance (applicability) of international accounting standards to developing countries such as Libya is a topic of significant interest amongst disclosure (non-accounting information) users. This is a key subject for standard setting purposes as IAS/IFRS have been adopted in many different nations all over the world, and many others are likely to adopt them in the near future (including, Libya). Finally the main limitations of this study are outlined and opportunities for future research are discussed, particularly in relation to this study’s findings about the requirement to reconsider the usefulness of the relationship between accounting practices and framework adoption of IAS/IFRS in Libya.


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DOI: http://dx.doi.org/10.5296/ijafr.v4i1.5477

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