Qualification and independence of the external auditor in law No. 116/1973 Regulating the Auditing Profession (An analytical study)

Abstract

This research examines the general framework of the auditing profession in Libya stipulated in Law 116/73 and the executive regulations issued thereunder. The two documents that regulate the accounting and auditing profession in Libya at the present time. Since the aforementioned law and its executive regulations were not established fundamentally to form nor clarify the profession's standards, but rather for mere legalization purposes, the controls and directions contained in the two documents were not explicitly referred to as local standards for the profession. Likewise, it has not been collected under a specific title.  However, it came, instead, in the form of elements spread throughout the articles of the law and the executive regulation.The goal of the study was to determine to what extent those texts that are connected to the independence and qualification of the external auditor could serve as local standards for professional practice. For this purpose, the researchers - adopting content analysis methodology- tracked the relevant materials in the two documents and analyzed their contents with the aim of evaluating that content in terms of its adequacy and comprehensiveness to serve as a criterion for practicing the profession.

The researchers concluded that although the two documents do cover several aspects of the two dimensions of the interest, there is an apparent deficiency in the treatment which requires a more broad context, through which an integrated system of standards, that takes into account the relevant characteristics of the local environment, can be established and implemented.