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LAGMAN, ALYSSA NOREEN R. MRS. NAJJARIA12201 JAN. 20, 2013

The Role of Accounting Systems in Decision Making,Planning and Control in a Developing Country

ABSTRACT

This study examines the present and potential role of accountinginformation systems in meeting the development needs of developingcountries, with a special focus on Libya and its unique legal, economic,religious, political and social context.

A contextualised study, it uses the economic development Theory ofGlobalisation in order to interpret the data, with particular emphasis onsocial and cultural factors determine economic condition, communication andits significance in global world and greater technological unification, includingglobalised accounting. Within the Libyan context, an ideographicmethodology is used to develop two case studies. One organisation isexamined as a provider of information (General Company for Pipelines), andanother, the Industry Secretariat, as a user/ stakeholder organisation. Avariety of data collection methods is used, including semi-structuredinterviews, observations, a small structured questionnaire and documentanalysis in order to make data triangulation possible.

Philippines is a developing country with significant differences fromdeveloped countries, including the way it makes use of accountinginformation. At present the accounting profession does not play a vital rolein the economic development of the country and current accountingpractices are based mainly on government legislation rather than planningand decision-making. This study illustrates the possibility, and even thenecessity, for accounting to play a significant role in the development ofLibya and other developing countries. Whilst this study demonstrates theimportance of an awareness of cultural context in the role of accountingsystems, it has focused only on one country, Philippines, and twoorganizations within that country. Consequently, even though developingcountries have many similarities, the general of this study is limited. Widerresearch of other contexts within Libya and beyond is needed to illuminatefurther the influence of social and cultural factors, communication andgreater technological unification on the practice of accounting. It would beuseful to replicate the study in other organizations within Libya and in otherdeveloping countries. The use of an economic development theory, whilerevelatory at one level, limits the interpretation of data. A different

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theoretical approach, or different research methods, for example, a largerstyle of survey or a different kind of qualitative study, could provide differentor additional insights.

This study helps to increase awareness of the role of accounting and

its potential contribution to economic development at the macro and microlevels and is a starting point for making a difference in developing countries.It provides a contribution to practical knowledge of the role of accounting indeveloping countries with special reference to Libya, by identifying issues inthe Libyan environment, acknowledging the present of powerful globalinfluences, and pointing the way forward to use accounting in a moresignificant way.

Most previous research in this area has focus on the suitability ofaccounting systems in meeting development needs, with little attentionbeing paid to addressing how these systems can be made more useful indecision-making, planning and control. This study acknowledges that thechallenge for developing countries, such as Libya, in adopting globalisedaccounting systems, is to adapt them successfully to their own regulatory,legal, political, cultural and religious setting. This has to be accomplishedwhile still achieving the production and effective use of timely, relevant andaccura te accounting information in order to serve the countrys developmentneeds. An assessment of the factors influencing the development and use ofaccounting systems in developing countries such as Libya is a necessarystarting point for achieving these goals. This study provides such anassessment.