Management Accounting Information among Libyan Small Firms Essay

The period between 1990 and 2000 witnessed the gap of the economic systems of most less developed states. During the same period many public companies privatised, with the remotion of most of the protectionist barriers finally changing the competitory environment in these economic systems ( Narayan, Godden, & A ; Reid, 2000 ) .In the execution of denationalization programmes in less developed states ( LDCs ) directors should be familiar with constructs such as uninterrupted betterment and quality consciousness. On another manus, societal relationships would emerge in the workplace.

There is a deficiency of involvement in direction control systems in little and moderate-sized endeavors on the portion of research workers for assorted grounds: Larger companies offer chances for more interesting issues ; it may be easier to place larger companies and to acquire entree to informations ; a deficiency of involvement in direction control systems among smaller and moderate-sized houses ; tradition ; and, possibly most of import, the handiness of funding. Indeed the phrase “ big is beautiful ” appears to use to direction control systems research in the field of direction accounting. nevertheless irrespective of the ground for the deficit of surveies, we perceive a existent demand for increased cognition about direction control systems in smaller and moderate-sized houses which have great impact on the national economic system.This survey investigates MCS used in little and moderate-sized houses, in add-on to the statutory one-year histories and fiscal studies. More specifically, the focal point is on the relationships between the usage of MCS patterns and information, and contextual factors of little houses. In specifics, the survey looks at the demographic features and civilization of the top direction squads ( TMT ) , every bit good as their impact on little and average houses ‘ fiscal public presentation. Furthermore, this survey concentrates on the organisational degree of little & A ; medium houses in placing possible causal relationships between variables.This paper presents grounds from five SMEs houses in fabricating sector in Libya.

In peculiar, it explores direction accounting and control patterns of little and average sized houses post -privatization, and what is the influence of social civilization and top direction squad demographics features on MCS. Using a multiplex instance surveies approach, this survey uses eventuality theory to clear up the findings.


The passage in Libya from a planned economic system to a market economic system, which commenced in the late eightiess, has resulted in cardinal alterations such as the restructuring of state-owned endeavors, a noticeable growing in foreign direct investing, and an emerging private sector. These alterations put immediate force per unit area on accounting patterns to alter to run into the demands of the new concern environment.In an effort to rehabilitate the mills and in order to hike their productiveness, the province has intervened by privatising all the mills at the first phase of the denationalization programme, reassigning ownership of mills to the bing work force and direction. As a consequence, many jobs and troubles have emerged, including: ( I ) most of the former directors transporting on their responsibilities in the same manner as before ; ( two ) some of the work force after going the proprietors of the mills, still believing at the same manner in public sector, reflecting their deficiency of apprehension of the denationalization procedure ; ( three ) inadequate capital for running the privatized mills ; ( four ) the privatized mills were still operated as portion of the populace sector, particularly during the first five old ages following denationalization ( for case, entire dependence on the province for obtaining foreign currency to purchase natural stuffs and other equipment ) ; and eventually, extra unsold stock was roll uping as a consequence of the deficiency of efficient selling policies. These phenomena have prompted the present research, given the fact that these mills are still underachieving despite the denationalization procedure ( Alfaitori, 2004 ; Hawadana, 2003 ; Mirza, 1989, 1995 ) .Small and Medium Enterprises ( SMEs ) are the chief driver of economic system and growing in most underdeveloped states and Libya is no exclusion.

They are the chief absorber of labor and a existent driver of investing, economic growing and competition. Admiting the singularity and importance of SMEs, the Libyan authorities began a denationalization programme with a focal point on reassigning ownership in the first phase of the denationalization programme for little and average houses ( SMEs ) .

Management control systems ( MCS )

In concern houses, direction control systems play a critical function, as they provide an instrument to last in an epoch of environmental uncertainness. Both internal and external environmental alterations have can hold a great impact on the nature of concern today. and accordingly on MCSs. Management Control Systems ( MCS ) has been defined as a system which gathers and uses information to measure the public presentation of different organisational resources like human, physical, fiscal, and besides the organisation as a whole sing the organisational schemes ( Otley, 1994 ) . MCS besides impacts the behaviour of organisational resources to implement organisational schemes ( Otley, 1994 ) .

In the context of SMEs, accounting information is of import as it can assist the houses manage their short-run jobs in critical countries like hard currency flow, outgo and costing, by supplying information to back up monitoring and control ( Son & A ; Pru, 2006 ) . Accounting information is besides utile for houses runing in a dynamic and competitory environment as it can assist them incorporate operational enterprises within long-run strategic programs ( Ismail & A ; King, 2005 ) . However, despite the importance of accounting information for their endurance, harmonizing to research workers, many SMEs do non strategically utilize accounting information to their advantage ( Marriott & A ; Marriott, 2000 ; McMahon, 2001 ; Perren & A ; Grant, 2000 ; Son & A ; Pru, 2006 ) .Harmonizing to the general position prevailing in the direction accounting literature, little houses have really simple constructions so they do non necessitate nor utilize formal direction accounting patterns and information ( Simons & A ; Davila, 2000 ) .

On the other manus, during the past decennary, some surveies have found that little houses, even bantam micro but potentially growing houses, do utilize direction accounting patterns and information, peculiarly if they are in the high engineering sector ( Laitinen, 2001 ; Reid & A ; Smith, 2000 ) . Additionally, consistent with this position, surveies in the country of strategic direction have found that considerable Numberss of little concerns are utilizing formal ( strategic ) and sophisticated planning ( Berry, 1998 ; Gibson & A ; Cassar, 2002 ; Orser, Hogarth-Scott, & A ; Riding, 2000 ) . The usage of such patterns seems to germinate particularly when a house moves beyond microfirm position ( Perren, 1998 ; Perry, 2001 ) .Davig, Elbert, and Brown ( 2004 ) , adapted the balance score card to study little industrial houses with fewer than 250 workers, they found that houses that included nonfinancial public presentation steps were likely to execute slightly better than those concentrating merely on the traditional fiscal and accounting-based steps. Furthermore, they found that in most houses in the survey a batch of informations collected appeared non be used, and less than half of the houses in the study used their unit cost informations to set about enterprises to better public presentation.

Data on cull rate, rework rates and supplier public presentation steps were used even less, and merely 16 % of houses used the information in determination devising.Noor and King ( 2007 ) , used a mail questionnaire to roll up informations from 214 little and moderate-sized houses. The findings suggested that accounting information alliance and usage was related to the houses degree of information engineering adulthood ; degree of owner/manager ‘s accounting and IT knowledge ; usage of expertness from authorities bureaus and accounting houses ; and being of internal IT staff.Sandino ( 2007 ) studied the acceptance of an drawn-out set of direction accounting systems from a sample of 97 immature U.S. retail merchants.

She found that most of these companies had adopted a set of direction accounting systems, including budgeting system, pricing systems, and stock list control.Noor, Azizi Ismail and Zin ( 2009 ) , in their survey of 136 little and moderate-sized houses ( SMEs ) in Malaysia, found that about 20 per centum of the houses did non fix an income statement, 40 per centum did non fix aging agendas, and more than 40 per centum did non fix a balance sheet. Important studies such as income statements were merely prepared on an one-year footing. While about half of the houses sought advice from accounting houses, more than 60 per centum of them visited accounting houses merely one time a twelvemonth. The findings suggest that most SMEs are still non cognizant of the importance of using accounting information for the benefit of their concerns. Furthermore, merely 14 per centum of reacting houses that prepared accounting information internally used accounting package.Directors, peculiarly from the top direction degree, are expected to be the chief users of accounting information.

Therefore, it would be lighting to analyze the effects of top direction demographic features and civilization on the usage of direction accounting information in the context of little and moderate-sized houses.

Top Management Team ( TMT )

During the past 20 old ages the upper echelon attack has been a frequent topic of survey, particularly in the field of direction ; nevertheless, the focal point has been chiefly on big houses ( Carpenter, 2004 ; Weinzimmer, 1997 ) .Harmonizing to the theory of upper echelons introduced by Hambrick and Mason ( 1984 ) , executives of organisations shape the organisational results. The theory proposes that the top direction squad ( TMT ) affects strategic picks of a house, profitableness and fluctuation in it, growing and endurance. In fact it can be said that the steadfast public presentation reflects the values and cognitive bases of powerful histrions or top directors of a house.

The importance of direction control systems ( MCS ) to administrations resides in their function in supplying information for planning, commanding, measuring public presentation, developing and bettering competitory schemes and doing determinations.MCS provides the same information to all directors within the TMT, but the existent choice and usage of information depends on personal penchants. The literature an upper echelon suggestes that these penchants are based on the demographic features of directors, including factors such as age, instruction background, senior status and experience ( Hambrick & A ; Mason, 1984 ) .St. simons ( 1994 ) , suggested that new directors frequently bring with them new visions and schemes.

Naranjo-Gil, Hartmann, and Maas ( 2008 ) suggested that the manner of utilizing MCS information is related to TMT features. Hambrick and Mason ( 1994 ) besides suggested that directors will be more familiar with the information to which they were exposed during their instruction and therefore will be given to concentrate on that sphere of cognition.Based on the information of 74 houses using from 5 to 98 employees taken from the Compustat II database, Weinzimmer ( 1997 ) found that functional heterogeneousness and size of direction squads were correlated significantly and positively with growing rate in little concern. However, industry heterogeneousness and age of a direction squad were non found to be associated with little concern growing.Birley ( 1990 ) reported some empirical indicants that little turning houses besides tended to utilize a greater figure of managerial maps and direction meetings.Berry ( 1998 ) examined strategic planning in little high tech companies. She has reported interesting consequences on direction constructions and strategic planning in those houses. Harmonizing to Berry ‘s ( 1998 ) ivestigation, formal planning was positively related to growing in gross revenues and to directors ‘ satisfaction.

In regard of the relationship between top direction squad and house ‘s public presentation, Naranjo-Gil ( 2009 ) found that TMT heterogeneousness was related to better public presentation, invention and alteration.The relationship between direction accounting and organisational public presentation has besides been under probe. In general, the literature supports the proposition that a tantrum between direction accounting and concern environment will ensue in better organisational public presentation ( Baines & A ; Langfield-Smith, 2003 ; Chong and Chong, 1997 ; Chong & A ; Chong, 1997 ; Hoque & A ; James, 2000 ; Mia & A ; Clarke, 1999 ) . However, some surveies report a weak association between these variables ( Williams & A ; Seaman, 2002 ) , whereas in other instance, the relationship between the alteration in direction accounting and the organisational public presentation appears to be indirect, through mediating variables, such as managerial relevancy information.

Gul, ( 1991 ) suggested that the effects of MCS on house ‘s public presentation were dependent on environmental uncertainness. Under high degrees of uncertainness, sophisticated MAS had a positive consequence on public presentation but under low degrees it had a negative consequence.Duh, Xiao, and Chow ( 2009 ) reported that there was a positive association between use of some MACs and house ‘s public presentation.Although TMT homogeneousness or heterogeneousness may impact the usage of direction accounting information derived from MCS, national civilization can besides act upon the manner TMT usage this information.

National Culture

Hofstede ( 1980 ) dei¬?nes the civilization of a state ( national civilization ) as “ the scheduling of the head that is manifested in the values and beliefs of a society ” . Valuess are rei¬‚ected in an person ‘s penchants for certain provinces of personal businesss.

Hofstede identii¬?ed four work-related values or national civilization dimensions that differ consistently across states: power distance, individuality Bolshevism, masculinity-femininity and uncertainness turning away. Subsequent research reported by Hofestede ( 1988 ) , identii¬?ed a i¬?fth national cultural dimension, viz. , Confucian dynamism.

Hofestede ‘s dimensions for Arab Countries and Libya

The findings of the four cultural dimensions are presented in the undermentioned tabular array ( Table 1 ) . In add-on to the consequences reported by Hofstede ( 1980 ) , other consequences for Arab states are besides presented for comparing ( Twati, 2008 ) . Surprisingly, the consequences of Twati ‘s survey in Libya ( 2008 ) in an epoch of engineering, globalisation, and the Internet, produced consequences similar to Hofstede ‘s ( 1980 ) index. While many states ‘ indexes worldwide have changed since Hofstede ‘s anticipations of the 1970s, Libyan consequences remain similar to Hofstede ‘s consequences of the seventiess.

Twati ( 2008 ) , found that Libyan civilization displays a high power distance, high uncertainness turning away, leftist and rates mid-range on the masculinity-femininity index. These values indicate that Libyan organisational civilization is likely to be more inclined to control-oriented civilizations and mechanistic constructions.Table 1: Hofesteds ‘s Study and Twati ‘s Survey: A comparsion



Power DistanceIndex Rank


Uncertainty turning awayIndex Rank

Masculinity muliebrity

Index Rank

Individualism Bolshevism

Index RankHofstede ‘s survey 1980( Arab World ‘s )IBM Company80 44-4568 24-2553 28-2938 25Twati ‘s survey 2008 ( Libya )Oil Companies72714518Beginning: Hofestede ( 1980 ) , Twati ( 2008 )National civilization dimensions have been used in cross-cultural surveies in accounting ( Frucot & A ; Shearon, 1991 ; G. Harrison, 1992 ; Soeters & A ; Schreuder, 1988 ) .

Harrison ( 1994 ) examined the effects of national civilization on the degree of decentalisation of duty.Following Hofstede & A ; Bond ( 1988 ) scrutiny of national civilization in international concern, Chow, Harrison, McKinnon and Wu ( 2002 ) and Hui ( 1984 ) , studied the effects of national civilization on all public presentation measuring and rating in fabrication i¬?rms. However, national civilization has non been examined in the usage of direction accounting information in SMEs.Tsui ( 2001 ) suggested that the interaction effects of MAS and budgetary engagement on managerial public presentation were different, depending on the cultural background of the directors. These consequences have deductions for the design of effectual control subsystems and suggest that the direction accounting theories developed in the context of Western economic systems may non be generalizable to the Chinese environment.Etemadi et al. , ( 2009 ) investigated the impact of civilization dimensions ( individuality, power distance, uncertainness turning away, and maleness ) on direction accounting and managerial public presentation. The consequences indicate that direction accounting tools and techniques, which improve managerial public presentation in one organisation may hold a dysfunctional impact in another organisation with a different cultural background.

Libya has undergone a transmutation from a centralised economic system to a market economic system, Libyan authorities started the first phase of this programme ( denationalization ) with the SMEs. In this paper we explore the influence of national civilization in the context of Libya, following the alterations in economic policy in Libya.


This survey adopted a pure qualitative research method. The principle for the pick of qualitative attack stems from the nature and context of this survey. The research workers seek to understand the context of the research affair in footings of how and why it occurs. That is, how TMT uses direction accounting information, and why.The survey selected a little sample of directors utilizing a random sample.

Interviews were carried out with 21 top direction squads considered to be users of direction accounting information in little and moderate-sized companies in Libya.The interviewees were 21 top direction squad members who were from 5 companies in different types of industry ( 2 companies in the nutrient industry ; 1 company in the furniture industry ; 1 company in the fabric industry ; 1 company in the chemical industry ) . Three companies were moderate-sized and two companies were small-sized. In this survey, the size of companies is dependent on the figure of employees as little size is defined as companies with fewer than 100, employees and moderate-sized companies are those with more than 100 employees but fewer than 500 employees.

This categorization is based on the Resolution of the General Public Committee ( Libya ) , No 31 of 2003 for denationalization ( General Public Committee, 2003 ) .Table 2: Business Types and Firm Size of selected companies


Type of industry

Number degree Fahrenheit employees

Size of houses

AFurniture industry175MediumBacillusFood industry216MediumCFabrics industry90SmallCalciferolChemical industry470MediumTocopherolFood industry65SmallThe interviewees granted permission to tape record the interviews which were conducted in Arabic. These were so transcribed in Arabic, and so translated into English.The undermentioned subjects were identified from an analysis of the interviews:General information ( TMT, companies ) .Business environment and competition station denationalization.Types of concern scheme pursued by little and average size houses in Libya.Chart of accounting and cost Centres.

Number of comptrollers.The usage of computing machine in accounting systems.The figure of studies is issued by accounting systems.The clip of prepare the studies.Budget systems.Cost systems.Purpose of fixing accounting studies.Purpose of utilizing accounting studies in information.

Degree of apprehension of accounting information.How directors evaluated steadfast public presentation.The impact of social civilization on:- Accounting information revelation.- The relationship between directors and employees.

Consequences and treatment:

A frequence graduated table was developed to sum up the responses of the interviews conducted.

The graduated table were calculated by numbering the figure of similar sentiments about the same issue addressed in the interviews. The major issues are discussed in the undermentioned subdivisions supplying a deeper penetration into the positions of the respondents.

The Impact of TMT Demographic Profiles and National Culture on the Use of Management Accounting Information:

A budget is one of the oldest instruments of a direction control system. Both big and little organisations use budgets to be after their concern in front to acquire an thought of what the hereafter will convey and besides to reexamine the state of affairs to cognize how carry out future programs. Planing and budgeting systems increase the sum of direction control in organisations because they encourage long-run thought, achieve coordination and create challenging but realistic ends. There are alterations in the usage of budget information during pre-and post-privatization phases.

During the pre-privatization phase the intent of fixing a budget was to avoid being accountable to any authorities organic structure, and the houses prepared accounting studies merely to carry through demands of the Ministry of Industry.“ I think, pre-privatization our company prepared accounting studies merely to avoid being accountable to any authorities organic structure. We sent our budgets to the Ministry of Industry and after three of four months they sent to us the unit monetary value for our production. We did non care about the losingss ; everything comes from the top down ” ( FMA )“ I think the fiscal studies were non of import for us, They ( accounting section ) require many studies hebdomadal and monthly, I think this is merely extra work ‘ ( PMD ) .However after of transportation ownership to employees under the denationalization programme, the intent of budget changed and, the point of position of directors besides changed in line with alterations in the competitory environment and market conditions.“ Post-privatization, the intent of direction accounting information changed. We use direction accounting information to measure the organisation ‘s public presentation, and we compare between planning and accomplishment every four months, but we monitor the hard currency flow day-by-day.

( FMA ) .The determination shows that the intent of fixing the budget changed pre-and post-privatization.Table 3: TMT Demographic Characteristics



Age group




Area of instruction


as director in this company ( old ages )

Entire work experience

( old ages )

AGeneral directorAdministrative directorFiscal directorProduction directorGross saless directorGMAAMAFMAPMASMA& lt ; 3030-4030-40& gt ; 4030-40MeterMeterMeterMeterMeterDiplomaBachelorBachelorBachelorBachelorEngineeringLowAccountingEngineeringEngineering1-51-51-56-106-106-1011-1516-206-1011-15BacillusGeneral directorAdministrative directorFiscal directorProduction directorGross saless directorGMBFMBPMBPMBSMB30-4030-4030-40& gt ; 4030-40MeterMeterMeterMeterMeterBachelorDiplomaBachelorBachelorBachelorEngineeringGeneralAccountingEngineeringEngineering6-101-51-56-106-1016-2011-1511-1516-2011-15CGeneral directorFinancialSales directorProduction directorGMCFMCPMC30-4030-40& gt ; 40MeterMeterMeterBachelorDiplomaDiplomaEngineeringManagementEngineering6-101-511-1511-156-1016-20CalciferolGeneral directorAdministrative directorFiscal directorProduction directorGross saless directorGMDAge-related macular degenerationFMDPMDSMD& lt ; 3030-4030-40& gt ; 4030-40MeterMeterMeterMeterMeterBachelorBachelorMaestroBachelorBachelorEngineeringEducationAccountingEngineeringEngineering1-56-1011-1511-156-106-106-1016-2011-1511-15TocopherolGeneral directorFiscal Sales directorProduction directorGMEFMEPME30-4030-4030-40MeterMeterMeterBachelorBachelorDiplomaEngineeringManagementEngineering1-56-106-106-1011-1516-20The determination besides shows that there are differences in usage of direction accounting information harmonizing to demographic features of top direction squads.“ My duty is execution of the production program ( quality and measure ) , we are directing hebdomadal studies to the fiscal section and the general director. I think the accounting system has shown that such a control system simply provides extra paperwork and incurs unneeded costs ” .“ I believe that the cause of Libyan organisations ‘ hapless public presentation is the failure of Libyan directors to recognize that there is different manner to pull off their organisation – a manner that outputs quality, higher productiveness, more occupations, and the ability to last the competition. Our scheme post-privatization requires more focal point on accounting information.

All directors agree with me about the importants of accounting systems and productions cost ” ( FMD )This consequence is consistent with the determination of Naranjo-Gil ( 2008 ) who suggested that the manner of utilizing MCS is related to TMT features. Professional directors have a background in which the cognition and experience in a particular sector is of paramount importance. Therefore, based on their experience and educational background, some directors are expected to be more operationally involved in organisation activities than others.There was consensus among all respondents about the importance and function of the hard currency flow statement ;“ ..

The general director is non an comptroller and he does non listen or care about what we have to state or compose. He is interested merely in the hard currency flow statement ” ( FMB ) .“ ..

. We evaluate our company ‘s public presentation through the budget system, income statement and hard currency flow statement ” ( FMA ) .“ We evaluate our company ‘s public presentation based on hard currency flow… …

” ( GMC ) .“ … we send the hard currency flow statement every twenty-four hours to the general director, and sometimes we discuses with him about the balance or the sum of hard currency flow in and out ” ( FMC ) .There was no strong grounds on the usage of direction accounting information in determination devising, and its relationship to the director ‘s demographic features and civilization background. This consequence is consistent with Hogarth ( 1993 ) who found that directors use different information for doing determinations harmonizing to their old cognition and background.

It is noted that there were some discrepancy among directors in the usage of direction accounting information.“ We are a little company, so we have to concentrate on quality and measure and go forth the histories for comptrollers… ..

” ( PMC )“ We are selling our merchandises based on market monetary value non based on production cost. The general director changes the gross revenues monetary value many times in the twelvemonth ” ( FMA ) .“ We try to maintain our costs under control and our production is similar to our rivals, but at a lower cost and we focus on ciphering the cost of production on a monthly footing.

The monetary values of our merchandises can non vie with the monetary values of merchandises in the international markets ‘ . ( FMD ) .“ .

.. The general director is non accountant, so he does non listen or care about what we have say or write ” ( FMB ) .The general information obtained from respondents shows that all general directors and production directors have an educational background in technology and do non hold any experience in the accounting or financal sphere. The mark companies were characterized as companies with an applied scientist ‘s civilization.

Engineers constitute the largest group in the house ‘s forces. Therefore, the engineering, merchandises and production have traditionally been considered really of import in the mark companies, while commercial and fiscal affairs have received less attending played minor functions. ( See Table 3 ) .This consequence is consistent with the determination of Hambrick and Mason ( 1984 ) which identified the upper echelon position and argued that directors perceive and use information otherwise, harmonizing to their experience, instruction and background. Directors will be more familiar with the information to which they were exposed during their schooling and therefore will prefer to remind experts in that sphere of cognition instead than embarking into another new and uniformities country.The usage of computing machine besides is really limited in accounting systems. Some companies continue use old accounting system bundles, but most of them still use manual methods for accounting informations. This could besides restrict the communicating of accounting information from the comptrollers to the directors and prevent organizational acquisition from taking topographic point.

“ We have one computing machine for the accounting section. We use it for rewards and wages. However with respect to the one-year fiscal statement, we still use the manual records ” . ( GMC ) .“ The usage of computing machine in our company is limited. Most of the fiscal studies are prepared manually ” ( FMB ) .“ Our accounting systems are computerised, but we still use old bundles of package. We have to do many accommodation to our accounting system.

.. . ” ( FMD ) .

With regard to the usage of accounting information for measuring public presentation, most houses rely on traditional statements and fiscal information in public presentation rating. Traditional costing, with both full costing and variable costing methods, is often used within the direction control systems of little and moderate-sized companies.Davila ( 2007 ) found that directors how had adopted fewer direction control system, and had shorter term of offices ( shorter experience ) .“ I as a general director, measure our company ‘s public presentation based on fiscal studies, like hard currency flow statement, gross revenues studies. I know there is a deficiency in our accounting system, so we will do alterations in the accounting system following twelvemonth. And we will get down to utilize the new system on 112010.

“ ( GMB ) .“ We evaluate our company ‘s public presentation through the budget system, income statement, hard currency flow statement ” ( FMA )“ We evaluate our house ‘s public presentation when we compare between planning and accomplishment in the budgetary systems, particularly the hard currency flow statement. We besides evaluate our house ‘s public presentation through the balance sheet and income statement ” ( GMD ) .Sing the impact of civilization on the usage of accounting information in little and moderate-sized companies ( Hofstede, 1980 ; Twati, 2008 ) , Libya is rated high on the power distance dimension. Specifically Libya were 80 in Hofstede ‘s survey in 1980 and 72 in Twati ‘s survey in 2008. Libya besides rated high on uncertainness turning away. Libya ‘s index of uncertainness turning away was 68 in Hofstede ‘s survey and 71 in Tawti ‘s survey.Some houses are enduring from fiscal trouble, but the impact of Islamic civilization, which prohibits involvement, make directors loath to borrow from Bankss vigorish.

“ … the deficit of difficult currency is the chief job in our company. It ‘s non unusual for the mills to be stopped for many yearss because of the deficit of natural stuff or trim parts, because there is non plenty difficult currency. We are disquieted about involvement.

.. … ” ( FMB )The impact of civilization on the relationship between directors and employees is besides apparent in Libyan society,“ The pick of the direction commissions in the industrial companies is based on societal, tribal and friendly relationships instead than on makings and experience ” .

( PMD ) .The survey indicates that in Libya with a Muslim bulk, cultural factors do impact accounting by and large and in peculiar the revelation of accounting information. The national civilization has a strong consequence on the pick of general directors and top direction squads all top direction squads are males ( see Table 3 ) .

All the directors are males, reflecting that top places are male dominated. This is an initial survey and the consequences need to be coni¬?rmed in future research.Although, all five privatized houses prepare one-year fiscal statements, but they do non print the fiscal statements or unwrap the net net income, and the degree of engagement in readying of budget is really low. This survey concludes that most houses are centralized in determination devising: the function of comptrollers in the rating of public presentation and decision-making is about negligible.

Decision and Restrictions

This paper reports the i¬?ndings of an exploratory survey analysing users ‘ perceptual experiences and usage of direction accounting information in SMEs in a transitional economic system. The survey was based on eventuality theory of direction accounting and was conducted through semi-structured interviews with a little sample of top direction squads in privatized SMEs in Libya.

The survey shows that the usage of direction accounting information is influenced by the demographic features of the male-dominated top direction squad. The usage of computing machines in accounting systems is limited.As with old surveies in the country, this survey found that competition has becomes more intense in the Libyan environment in the post-privatization period. The consequences reveal a immature direction squad with an mean age between 30-40 old ages. Educational background of the TMT varied ( 62 % technology, 14 % accounting and 24 % others ) . The survey besides found that the linguistic communication of accounting was non used as the agencies of communicating between directors. The linguistic communication of production ( or, to be more precise, the linguistic communication of building, as measured in footings of measure alternatively of costs ) was used by directors at all degrees in the endeavors, chiefly because all general directors and most of top direction squads members in the sample were male and had an educational background in technology. These demographic features have affected the usage of direction accounting information.

The bulk of directors did non look perturbed by their deficiency of involvement in fiscal information or its relevancy in their determination devising. They appeared to pay more attending to non-financial information such as run intoing production marks and keeping quality controls. These consequences are consistent with the determination of Naranjo-Gil and Hartmann ( 2007 ) , Naranjo-Gil et al. , ( 2008 ) and Simeon ( 2001 ) .Although accounting studies were prepared in the five Libyan privatized houses, they were oriented to the demands of external bureaus and the one-year outgo collection exercising and played small portion in either planning or operational decision-making and controlThis survey revealed that secretiveness is ini¬‚uenced by a scope of cultural values: high power distance and uncertainness turning away and low ranks in individuality and maleness therefore the i¬?ndings can non be generalised to other sectors.