Disclosure of Financial Reports in Libyan Industrial Companies - Research Proposal Example

Disclosure of Financial Reports in Libyan Industrial Companies The economic development of Libya and the tutelage of Muammar al-Gaddafi over the pastforty years has brought this once impoverished North African out of the abject reaches of poverty. Accordingly, Libya has witnessed tremendous economic growth since the military swept the autocratic King Idris from power and marshaled in a green revolution based upon the fundamentals of equality, social prosperity for all and state-led development. The Libyan state has recently been welcomed into the international community following the decision of President al-Gaddafi to abandon his attempts to achieve nuclear weaponry and the result has been diplomatic openness on a variety of fronts. Additionally, Libya has been the focus of much international scrutiny following the high-publicized released of convicted Lockerbie mastermind Abdel Baset al-Megrahi from a Scottish prison early last month and the eyes of the world are once again on Libya, a former pariah state according to many leaders of the Western world but today a partner in economic development and prosperity. Thus, accusations that Mr. al-Megrahi was released by Scottish authorities to facilitate economic relations between Great Britain and Libya emphatically demonstrate the important economic ties between Libya and the rest of the modern, developed world. Seeking to understand economic development and the increased necessity of the disclosure of industrial financial reports in the Libyan context, this research proposal aims to provide a thorough and comprehensive introduction to a new Libyan phenomenon. As Libya opens up its markets to the forces of liberal economics and seeks to compete with Western actors on the economic stage, the issues of openness and transparency will increase. How salient are issues surrounding the disclosure of industrial financial reports in the Libya today? Is Libya prepared for increased transparency in the realm of financial reporting? Are industrial companies in Libya equipped to fully disclose their personal financial records? Is full disclosure relevant in the Libyan context? (Cowell and Sulzberger, 2009; Otman & Karlberg, 2007) These questions and many more will be elaborated upon further in this analysis. This will be followed by a description of our methodology and questions surrounding measurement and the coding of variables. Seeking to employ a multifaceted qualitative/quantitative analysis, this project aims to utilize both forms of analysis. We will conclude with a concise overview of this important project proposal and end with a section detailing our conclusions and recommendations. We now turn the issues surrounding economic liberalization in Libya and the necessities of financial disclosure in the 21st century. Introduction The following will provide a concise introduction to the important issues surrounding economic liberalization, financial disclosure and the opening of companies to investors and shareholders in the Libyan context. Globalization, as it exists today, rests largely on the shoulders of neoliberal economics and the global entrenchment of capitalism as the dominant economic system in the world. Inspired by realist ideological doctrine, neo-liberalism is the belief in laissez-faire economics and its early proponents were Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States in the 1980s. The development model employed by Libya today is a response to the current wave of economic globalization and is a modern attempt at harnessing the forces of global economic capitalism through state-led development and an opening up of formerly closed businesses to investors and shareholders. By cultivating investors and utilizing the resources made available by already-established national corporations to stimulate growth, Libya hopes to capitalize on renewed interest in this country as a region for investment. As recently reported in the respected Shams newspaper, the shares of certain key Libyan companies will soon be sold on the Libyan national stock market (Otman & Karlberg, 2007). Research Aims and Questions: Seeking to understand the issues surrounding financial disclosure in the Libyan context, I propose an exploratory research project which will study this phenomenon in a holistic manner. Despite the widespread coverage surrounding integration of Libya with the rest of the world, there seems to be little knowledge about the concrete steps being undertaken by Libyan companies with respect to the proactive disclosure of financial documents (Shams, 2009). With this in mind, I hope to answer the following questions as part of the analysis: Is there a lack of disclosure or selective disclosure in financial reports in industrial companies in Libya? Is the level of financial disclosure affected by the following conditions? The advance of accounting information systems The size of the certain companies under analysis A companys overall financial performance What roes does the level of accountants qualifications play in the issue of proactive financial disclosure? Furthermore, my project goals are to 1) Recognize whether there clear disclosure regulations and whether there is lack of disclosure in financial reports in the studys sample; 2) Explore the relationship between the level of disclosure and the advance of accounting information systems; 3) Analyzing the interdependent issues of the size of the company, the Companys performance and the level of accountants qualifications; 4) Determine the information which is needed in order to provide the satisfactory level of disclosure required in the stock market setting. Methods: Seeking to provide as holistic an analysis as possible, we propose a heterogeneous sampling model. This model will allow us to include all opinions or views and we are not concerned about representing these views proportionately. Accordingly, a qualitative analysis suits the parameters of this project best. This project will be the result of extensive research and the bulk of the data explored will be obtained through scholarly analysis of communication theory as well as a comprehensive literature review of all current scholarly information on the subject. Although primarily qualitative in nature, if quantitative data is available, this information has been integrated into the overall analysis. To this end, scholarly journals websites and the latest books on the subject will be utilized. This research intends to undertake data collection through extensive research and coding of relevant information. Surveys, in-depth interviews will take place as this researcher attempts to narrow the focus onto one institute of higher education. I am presently in the UK, but I will travel to Libya to collect the data while undertaking the research.  In addition to scholarly research on the subject, this researcher has sought out primary documents from a variety of actors, both at home and abroad. Measurement: Utilizing an ethnographic qualitative approach, we propose to use direct observation of our respondent group as well as apply indirect measures such as written documents. Through in-depth interviews with individuals and groups, we aim to provide a comprehensive analysis of the issues at hand. Our interview structure will be followed by survey research in the form of a questionnaire, in order to form generalizations. A timetable will entail nine months of research and writing, beginning October 15, 2009. Prior to this date, this researcher will be undertaking a thorough review of all scholarly information on the subject of financial disclosure in Libya. Since the awareness of this issue is quite recent, this researcher anticipates minor challenges accessing peer-reviewed information on this subject. An early timetable for completion posits that research will be undertaken between now and December 31 2009. A complete draft will be prepared before the end of the scholastic year in 2010. Conclusions and Recommendations This study aims to provide an introspective look at the effectiveness of financial disclosure in the Libyan context and suggest avenues for improvement. Thus, the analysis will be both descriptive and prescriptive in nature. While scholars Medawi (2000) and Khalifa (1999) are leading the way with some excellent explanatory research, I hope to add to the existing literature on the subject and provide an in-depth analysis of an increasingly important phenomenon. REFERENCES Cowell, A. & A.G. Sulzberger. (2009). Lockerbie Convict Returns to Jubilant. New York Times. Last Accessed September 10 2009 http://www.nytimes.com/2009/08/21/world/europe/21lockerbie.html Khalifa, M. (1999). Social Responsibility and Methods to Disclose it in Industrial Companies in Libya. Benghazi: University of Garyounis Press. ”Libya’s Opening”. (2009). Al Shams newspaper. Last Accessed September 10 2009 http://www.alshames.com/details.asp?Id=2396&Page=4 Mehdawi, S. (2000). Disclosure in Financial Statements in Commercial Banks in Libya. Benghazi: University of Garyounis Press. Otman, W. A. & E. Karlberg. (2007). The Libyan Economy: Economic Diversification and International Repositioning. London: Springer. Read More