The Role of Cultural Dimensions in the Non-Adoption of International Financial Reporting Standards in Libya "A Study of the Points of View of Professionals and Academics"

Abstract

The study aimed to identify the role of cultural dimensions in the non-adoption of International Financial Reporting Standards (IFRS) in Libya, based on Hofstede's cultural theory. The study used an inductive approach to accurately identify the study variables; and the deductive approach to test the study's hypotheses and draw practical conclusions. Data were collected using a questionnaire distributed to certified public accountants and faculty members from the Accounting and Sociology departments and then analyzed using the R statistical software. The results of the study showed that all six cultural dimensions were statistically significant, i.e., cultural dimensions played a role in the non-adoption of IFRS in the Libyan environment, as evidenced by the high-power distance, increased tendency toward collectivism, fear of ambiguity, dominance of masculine values, weak long-term orientation, and high level of self-control in Libyan society. These factors represent cultural barriers to the adoption of international accounting standards, limit openness to these standards, and weaken the regulatory and professional flexibility necessary for their implementation. The results also showed that demographic differences are highly homogeneous, as demographic variables did not show significant differences in the respondents' opinions on the role of cultural dimensions in the non-adoption of international standards for financial reporting, with the exception of limited effects of educational qualifications, professional experience, and professional specialization on only some dimensions, confirming that the non-adoption of IFRS is mainly due to the general cultural characteristics of society rather than individual or professional differences. Based on this, the study recommends the need to adopt a comprehensive reform approach that takes into account the cultural dimension, by reducing centralization and promoting professional participation, developing the individual responsibility of accountants, and reducing resistance to change through practical training and guidance, in addition to developing a long-term national plan for the implementation of IFRS, providing training and awareness about the standards, and supporting cultural change programs and professional networking with successful international experiences.