W M Wright & Co-Accountant Penrith Explained

Accounting is a process which is used and practiced every day, no matter where in the world you are. Going along with the fact that it is used no matter where you are, this means there are hundreds of countries using accounting in one way or another. I chose to concentrate on developing countries for my subject, and how they use accounting. I will later concentrate on Libya and Indonesia on a smaller scale, looking a little further into the developing countries. Get more info about W M Wright & Co-Penrith Accountants.

Our accounting procedures and principles are very much set in stone here in America, where we are one of the most highly developed countries in the world. Though it is not as easy to come up with set standards in other countries that aren’t as advanced. Many businesses around the world have adopted GAAP, but those that don’t do this have the worldwide uncertainty accounting issue There are many factors that impact the accounting system of a country. The nature of the accounting system, the stage of economic growth , social factors, education , culture, the legal system, politics and accessibility to the outside world all have a significant effect on how a nation uses accounting (Zehri). Given that a developing country is dealing with most of these factors, it can be easily established that it affects its accounting procedures in a negative way.

I decided to look at the Libya accounting more closely. Libya is situated in Northern Africa and has a population of only 6 million. Libya is only one of the countries left without IFRS (Zehri) yet to be implemented. Income tax was first implemented in 1923. Italian companies brought their own accountants with them at this time, but at this stage Libya had not studied accounting. There were no accounting workers (Zakari) up to 1951, when Libya became independent. Libyan companies were dependent on other accounting firms in the countries, typically from Italy and the UK. Once the oil discovery emerged in the 1960s, Libya acquired financial capital used to grow company (Zakari) operations. Around this point, Libya agreed to enforce some rules. The Commercial Code of Libya of 1953, the income tax law of 1968, the Libyan Petroleum Act of 1955, and the 1975 developed LAAA (Laga) were all produced. Libya ‘s accounts are affected by four main sources: regulatory criteria, technology impacts, accounting education effects, and changes in their climate (Zakari). IASB took over the previous use of IASC in 2001, and this was revised to become IFRS. The conversion of their accounting to IFRS is an obstacle (Laga) given the problems Libya has created.