Journal of Islamic Accounting and Business Research

Emerald Article: Understanding the dominance of Western accounting and neglect of Islamic accounting in Islamic countries Ghada Altarawneh, Mike Lucas

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Ghada Altarawneh, Mike Lucas, (2012),"Understanding the dominance of Western accounting and neglect of Islamic accounting in Islamic countries", Journal of Islamic Accounting and Business Research, Vol. 3 Iss: 2 pp. 99 - 120 http://dx.doi.org/10.1108/17590811211265920 Ghada Altarawneh, Mike Lucas, (2012),"Understanding the dominance of Western accounting and neglect of Islamic accounting in Islamic countries", Journal of Islamic Accounting and Business Research, Vol. 3 Iss: 2 pp. 99 - 120 http://dx.doi.org/10.1108/17590811211265920 Ghada Altarawneh, Mike Lucas, (2012),"Understanding the dominance of Western accounting and neglect of Islamic accounting in Islamic countries", Journal of Islamic Accounting and Business Research, Vol. 3 Iss: 2 pp. 99 - 120 http://dx.doi.org/10.1108/17590811211265920

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Understanding the dominance of Western accounting and neglect of Islamic accounting in Islamic countries
Ghada Altarawneh
Department of Accounting, Faculty of Business Administration, Mutah University, Mutah, Jordan, and

Dominance of Western accounting 99

Mike Lucas
Centre for Accounting and Finance, The Open University Business School, Open University, Milton Keynes, UK
Abstract
Purpose This paper seeks to explore the reasons for the dominance of Western accounting and neglect of Islamic accounting in Islamic countries, using Jordan as a case study. Design/methodology/approach The paper reports the results of a series of interviews, using a semi-structured questionnaire, with senior members of the accounting regulatory regime in Jordan. The interview data are supplemented by relevant secondary (documentary) data. Findings The paper concludes that economic dependency on developed Western nations and their international agencies is the major factor determining accounting policy and practice in Jordan. Research limitations/implications The main limitations of this study are the uncertainty concerning the extent to which the respondents views are representative of accounting policy makers in Jordan, and the inevitable degree of subjectivity involved in evaluating the relative impact of economic dependency and other factors on accounting policy in Jordan. Originality/value The paper enhances understanding of the neglect of Islamic accounting in Islamic countries and provides insights into the prospects for and barriers to wider adoption of Islamic accounting in future. Keywords Islamic accounting, Western accounting, Developing countries, Colonialism, Economic dependency, Jordan, Accounting Paper type Case study

1. Introduction The idea that accounting is a neutral unbiased technology has long been rejected by scholars (Scott, 1931) because accounting is inuenced by various factors including the political and economic interests of particular groups in society (Lehman and Tinker, 1987; Cooper, 1980; Susela, 1999). Hopwood and Miller (1994, p. 1) state:
[. . .] accounting is no longer to be regarded as a neutral device that merely documents and reports the facts of economic activity. Accounting can now be seen as a set of practices that affects the type of world we live in, the type of social reality we inhabit, the way in which we understand the choices open to business undertakings and individuals, the way in which we manage and organize activities and processes of diverse types, and the way in which we administer the lives of others and ourselves.
Journal of Islamic Accounting and Business Research Vol. 3 No. 2, 2012 pp. 99-120 q Emerald Group Publishing Limited 1759-0817 DOI 10.1108/17590811211265920

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In other words, accounting is an important economic tool reecting the interests and viewpoints of many interested parties. Many studies (Cooper, 1980; Susela, 1999) have provided evidence of various interests in different contexts. Accounting derives its usefulness from its ability to reect the social, cultural, and economic aspects of the organizations on which it reports. Each country (society) has its own political, economic and cultural values, which requires the economic goals and the information needed to achieve them to be different in different societies. Thus, transferring accounting that reects the socio-economic and cultural values of developed nations to developing nations has been criticized by various scholars as being unsuitable and irrelevant for developing nations (Briston, 1978, 1990; Hove, 1986; Samuels and Oliga, 1982; Wallace, 1990) and particularly to those whose societies are bounded by specic religious principles in their everyday life, such as Muslim societies in Islamic countries. From an examination of the relevant literature, including the Islamic accounting and economics literature, it is clear that Islamic societies do need an accounting system that suits the ideology and values of Muslims, to assist them in meeting their religious obligations (Hameed, 2001). However, despite recognising that Western accounting is inconsistent with the values and principles of Islam, it is still found to dominate accounting practice and education in Islamic countries. The literature suggests a number of possible reasons for the adoption of the Western (in particular the Anglo-American) accounting system in these countries, including the impact of colonialism, the needs of multinational corporations and the demands attached to the provision of nancial aid (Hove, 1986; Briston, 1978; Cooke and Wallace, 1990). In short, accounting that has been employed in these nations is intended to serve the needs of various external parties rather than the needs of local and indigenous people (Hove, 1986; Samuels and Oliga, 1982). Case studies undertaken by Poullaos and Sian (2010) indicate that the demands of British capital in all instances had a profound impact on the requirements of accounting practice in developing countries (Verhoef, 2011). These writers however, acknowledge that there is signicant variation among countries, implying the need for country specic histories/studies of the ways in which the imperial legacy interfaced with the domestic people and cultures. Country specic studies are therefore necessary to establish the impact of colonial authority and answer the question of whose interests have been paramount in determining accounting policy and practice and what was the balance between imperial interests, commercial interests and those of the indigenous population (Verhoef, 2011). Although economic dependency on the west has been emphasised by many writers as the primary reason for developing countries adopting Western economic and accounting policies, there would seem, logically, to be a number of possible reasons for Jordans adoption of Western accounting and consequent neglect of Islamic accounting: . Ignorance of alternatives, i.e. Western accounting is accounting! . In a world of uncertainty and ambiguity, do what everybody else (or at least an exemplar organization/country) does. . The cost-benet calculus, i.e. the costs of developing and implementing its own accounting system/standards are prohibitive for a small, relatively poor country and the limited benets do not justify the costs involved.

Adherence to a widely accepted set of high quality accounting standards (which cost millions of dollars to produce) reduces the risks for investors and thereby reduces the cost of capital for Jordanian companies. Jordan is economically dependent on the west and must therefore adopt economic and accounting policies that best serve Western interests.

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As the literature review which follows this introduction indicates, a number of writers have suggested that economic dependency is self evidently the explanation for the adoption and continued use of Western accounting in developing countries. However, there are as, indicated above, a number of competing explanations, none of which have been conclusively supported or refuted by previous research and this is the justication for the current study. This paper is structured as follows. The next section presents the literature review, followed by a description of the country context in Section 3. Section 4 describes the research methodology employed in the current study. Section 5 discusses the research ndings and Section 6 draws conclusions and indicates some limitations of the current study and future research directions. 2. Literature review Many efforts have been made to explain the reasons for international differences in accounting practices and regulation and the factors that inuenced the accounting approach in a particular country (Nobes, 1998; Gray, 1988; McKinnon, 1986; Cooke and Wallace, 1990, and others). These writers argue that accounting in a country is inuenced by various external and internal factors. Internal variables include the stage of economic development, goals of society, legal rules, economic systems, and cultural variables. External factors are those factors that are likely to make accounting regulators in a country ignore or give less emphasis to internal factors (Cooke and Wallace, 1990, p. 82), such as colonial history, the inuence of multinational corporations, and the impact of regional economic communities such as international trade communities, membership and participation in international organizations as well as the effects of international governing and globalizing of accounting around the world. A number of researchers have also suggested that accounting regulations in developing countries are more likely to be a result of the demands of foreign corporations that attempt to invest in these countries. This may be because of the exclusive dependency of these developing countries on external nancial sources and assistance for survival by organizations such as the World Bank (WB, 2004) and the International Monetary Fund (IMF). In contrast, countries with plenty of resources, advanced technologies and professional experience in the accounting eld are more likely to develop their own accounting regulation. In short, there is a consensus among researchers that accounting in developing countries is an outcome of various external and internal factors, which have also been identied as hindrances/obstacles that limit the opportunity for developing countries to develop or improve their own accounting approach, and consequently contributed to the dominance of Anglo-American accounting worldwide. Some researchers argue that imperial legacies are a major barrier to the process of localizing accounting professional bodies (Annisette, 2000; Bakre, 2005, 2006; Carnegie and Parker, 1999). Annisette (1996) investigated the circumstances surrounding the localization

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of the accounting profession and training in Trinidad and Tobago. She observes that the traditional ways of qualication have been criticized by both the business community and the government as being irrelevant and unsuitable for Trinidad and Tobagos environment. She concluded that the inuence of imperialism and the dominance of Western accounting continue to be the major obstacles facing any localization plans in many former colonies. Further, the study indicates that the Western accounting framework is inappropriate for the countrys socio-political and economic environment. Briston (1978) illustrates how accounting systems in Nigeria and Sri Lanka have been formed by colonialism (British colonization). Accounting in these countries still copies the British accounting principles and systems even after independence. Briston criticizes the adoption of British accounting (as he refers to it) by other nations that have different economies, cultures and even values. He points out that British accounting has been criticized by its own society (Western nations, Western scholars) for not being free of bias and of causing many problems (Briloff, 1990; Miller and OLeary, 1987). He adds that if this accounting creates problems for the economy that it is supposed to serve and whose values it represents, how can it be employed to serve different socio-economic contexts. Similarly, Balachandran (2007) provides further evidence on the inuence of imperialism and the colonization legacy on accounting system (particularly management accounting) adopted in the country even after Sri Lanka achieved its independence. Some studies, such as that by Loft and Aggestam (2007), are concerned with understanding the role of certain international organizations in attempting to globalize and govern accounting around the world. In the colonialist age, accounting techniques and practices were one of the signicant capitalist instruments that had been employed by the colonizers to support the procedures of accumulating prot by imperialist nations (Neu, 1999). In order to continue to protect the interests of imperialists after the independence of many developing countries, different mechanisms are needed and the formation of international institutions such as the World Trade Organization (WTO), WB and IMF serve the purpose. These international institutions have insisted that the Member States (particularly developing countries) employ the International Financial Reporting Standards (IFRS) as a benchmark for their accounting system. Thus, developing nations are obliged to adopt this sort of accounting, ignoring its suitability for their particular socio economic situation (Loft and Aggestam, 2007). Ashraf and Ghani (2005) consider the factors that inuenced the origins, development and growth of accounting practices and disclosures in Pakistan. These researchers discuss how the colonial epoch and more recently, some international nancial institutions, have inuenced and shaped the countrys accounting and reporting practices. They found that besides the colonial milieu of the country, accounting practices in Pakistan have been inuenced by international nancial institutions, such as the WB and IMF, essentially because of Pakistans political relationship with the USA and the Western world. Consequently, as demonstrated by Ashraf and Ghani (2005), the impact of Pakistans cultural values on the accounting system cannot be identied clearly because of Pakistans colonial past and its need for Western nancial assistance. Essentially then, previous studies have tended to suggest the signicant impact of various international capitalist institutions on the accounting policy of developing countries. However, what is missing in the literature are the possible reasons for Islamic accounting not being adopted by developing Islamic countries, despite the growth and global acceptance of Islamic nancial instruments.

There are a number of other logical possibilities for the continued dominance of Western accounting. First, it may be attributed to ignorance of the alternatives, including the existence of Islamic accounting. It may be that, for many people, Western accounting is accounting. Haniffa and Hudaib (2010) are acutely aware of this possibility in writing the editorial for the launch of the inaugural issue of the Journal of Islamic Accounting and Business Research. The rationale for their editorial paper (and indeed the new journal itself) is that it is useful to new readers of the journal around the world, who are interested but have limited knowledge in the area. A variation on the ignorance of alternatives theme, is that the situation may be explicable in sociological rather than economic terms, in particular, in terms of the institutional isomorphism proposed by advocates of New Institutional Sociology (NIS) such as DiMaggio and Powell (1983). These authors identify what they describe as mimetic processes. Uncertainty is a powerful force that encourages imitation. Faced with uncertainty and ambiguity in our interpretation of the world around us, it is difcult to know what to do. Consequently, it is best to do whatever everybody else does (or at least what a model or exemplar entity or country does). Forrester (1996) has discussed how this occurs in the eld of nancial accounting. There has, for example, been a strong tradition within continental Europe of looking at what the neighbours are doing and adopting their solutions for ones own use. DiMaggio and Powell (1983) also identify what they call normative processes. This isomorphism stems primarily from professionalization: the collective struggle of members of an occupation to dene the conditions and methods of their work and to establish a cognitive base (i.e. way of looking at the world) and legitimation for their occupational autonomy. Two aspects of professionalization are important sources of isomorphism. One is the resting of formal education and of legitimation in a cognitive base produced by university specialists or professional associations. The second is the growth and elaboration of professional networks that span organizations and countries and across which new models diffuse rapidly. Universities and professional training institutions are important centres for the development of organisational norms among professional managers and their staff. Professional and trade associations are another vehicle for the denition and promulgation of normative rules about organisational and professional behaviour. Such mechanisms create a pool of almost interchangeable individuals who occupy similar positions across a range of organizations and possess a similarity of orientation and disposition (Lucas, 2005). Could this explain the adoption of IFRS by Islamic developing countries? In 1997, the Arab Society of Certied Accountants called for all of its 22 member countries to adopt international accounting standards (then IAS, now IFRS) as their national GAAP, in the Dubai Declaration. This would seem to be an example of normative processes and/professionalization in action. Conversely, the Accounting and Auditing Organisation for Islamic Accounting Institutions (AAOIFI), has not wielded much inuence. Another possible reason is the rational choice theory or the cost-benet calculus. It is prohibitively expensive for a small developing country with limited resources to develop its own accounting standards, when a set of internationally recognised, high quality standards already exists (i.e. IFRS) (Allingham, 2002). An example is the AAOIFIs decision to adopt existing (IFRS) standards and only address aspects that are not shariah compliant, rather than to start from scratch, based on the shariah.

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The third reason may be attributed to the cost of capital minimisation argument. It is possible that using an internationally recognised set of high quality accounting standards, such as IFRS, may help reduce investor risk and thereby lowers the cost of capital for companies (Leuz and Verrecchia, 2000). Globalisation of corporations means that shares are traded on international capital markets (Dos Santos, 1971) and investors will choose to invest in countries deemed to have low risk. It is widely accepted that developing countries pose higher risk to investors due to a variety of national differences in economic structures, policies, socio-political institutions, geography, and currencies. Since Islamic nance and banking is a relatively new phenomenon, with strict religious rules, investors are more cautious of the additional risks involved. Hence, adopting an established accounting system and accounting standards will help gain investors condence to invest in the country. Closely related (although not identical) to the third reason is economic dependency of developing countries on former Western colonial powers. The need to attract foreign direct investments (FDIs) and to seek international funds to help nance the development and growth of developing countries means that developed nations can exert pressure on developing countries to employ an accounting system that suits Western interests. The conditional assistance and aid given by international institutions to the less developed nations depends on the willingness of these countries to undertake a range of social, cultural, economic and political changes including accounting ones. This contributed to strengthening the domination of conventional accounting in these countries, preserving the interests of international nancial institutions, such as the IMF, WB, and developed nations, even if this sort of accounting is not appropriate for developing countries culture, values, economy and environment. There have been studies concluding that colonialism is the reason for the dominance of Western accounting, but not studies of Jordan. Verhoef (2011) argue that there is signicant variation among countries in terms of their history and institutional framework; this implies the need for country specic studies to explain the situation with respect to a particular country. In short, the literature review demonstrates that there have been a number of competing explanations for the dominance of Western accounting and neglect of indigenous alternatives such as Islamic accounting in Muslim countries. However, the evidence adduced is inconclusive, necessitating further, country specic research. As each country has a different history, circumstances and institutions, there is a need for an accumulation of country specic studies. The current study is one such. Since Jordan established one of the earliest Islamic banks, it is surprising that Islamic accounting has not been developed by nor adopted in Jordan. What are the possible reasons for lack of commitment by those with authority to adopt an accounting system that corresponds to the principles and values of their own culture and religion? To help understand the reasons, it is rst important to understand the Jordanian environment. 3. The Jordanian context The Hashemite Kingdom of Jordan is a small developing Arab country located in the heart of the Middle East. Islam is the state religion and about 98 percent of Jordanians are Muslims. Jordan is classied by the WB and IMF, as a lower middle income country. According to Jordans Department of Statistics, 13 percent (30 percent according to unofcial estimation) of the Jordanian workforce is unemployed. Jordan has quite

an advanced health care system (World Health Statistics, 2009), education and the adult literacy rate are very high (92 percent). Net outstanding public debt (domestic and external) increased to reach JD 9,432.8 million or 58.2 percent of estimated GDP for 2009. Total external debt service (government and government-guaranteed) on a cash and commitment basis amounted to JD 436.2 million at the end of 2008, of which JD 291.3 million were principal payments and JD 144.9 million were interest payments (Table I). In 2009, the overall budget decit excluding foreign grants, amounted to $1.975.26 (JD 1,410.9) million (the Ministry of Finance, Jordan, 2009). As Table I illustrates, Jordans debt and foreign aid receipts are extremely large and increasing, making the country totally reliant on foreign (predominantly Western) nancial aid and assistance. 4. Research method In order to carry out this research, a number of senior members of the various organizations constituting the accounting regulatory regime in Jordan were interviewed. The primary research instrument employed was a semi-structured questionnaire, constructed using the implied testable propositions of dependency theory/neocolonialism. Dependency theory has two aspects. First it asserts the fact of economic dependency of periphery (i.e. relatively poor, developing) countries on core (i.e. developed, Western) countries, in particular former colonial powers. Second, it asserts that the core countries intentionally pursue policies to keep periphery countries poor and dependent, in order to continue economic exploitation of them, even after the notional granting of independence. In this research, we are not considering the second aspect of dependency theory; we are focusing instead on the rst aspect: the fact of economic dependency and whether this provides the most cogent explanation for Jordans adoption of Western accounting and relative neglect of Islamic accounting. Consequently, the semi-structured questionnaire used for data collection was designed to capture the requisite information concerning the testable propositions implied by the rst aspect of dependency theory. The main categories of questions asked (reecting the testable propositions implied by dependency theory) are shown in the Appendix. Data collected by using this questionnaire was supplemented by documental data (using documents and web sites of the selected case studies (organizations). Employing multiple data collection methods or data sources facilitates triangulation, which increases the validity of the ndings ( Janesick, 1998). The combination of different methods, including semi-structured interviews and use of documentary data, allowed the researchers to match the interviewees responses with the documentary evidence, as well as looking for any contradiction between what the researchers were told and what was revealed by other publicly obtainable resources. Semi-structured interviews are conducted within a fairly open framework, thus, the questions that have to be asked are not always prepared in advance. Many of the questions are generated during the interview, which gives both the interviewer and the participant the exibility to investigate and discuss further details or other issues, unlike the structured interview, where all questions are compiled and planned ahead of time. Nevertheless, sometimes the interviews take the form of a conversation rather than a question and answer technique.

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Series

Total debt service (percentage of exports of goods, services and income) 7 8 5 4 3 5 6 8 8 10 9 12 13 17 19 24 31 20 20 24 20 15 14 12 18 16 16 10 13 11 8 16 8 6 6

Time External debt stocks, total (current US$) 119,092,000 153,349,000 180,465,000 214,802,000 270,699,000 342,815,000 432,464,000 796,334,000 1,111,303,000 1,417,948,000 1,866,842,000 2,186,349,000 2,648,432,000 3,021,412,000 3,286,370,000 3,943,827,000 4,831,644,000 6,261,594,000 5,918,248,000 7,316,082,000 8,332,910,000 9,700,260,000 7,966,938,000 7,644,546,000 7,553,124,000 7,660,562,000 7,385,455,000 7,313,840,000 7,560,998,000 8,083,091,000 7,354,865,000 7,534,261,000 8,108,224,000 8,337,366,000 8,066,184,000 7,696,176,000 8,000,140,000

Ofcial development assistance and ofcial aid (current US$) 88,290,000 91,790,000 81,730,000 82,650,000 75,550,000 68,950,000 73,840,000 53,500,000 45,730,000 48,530,000 80,080,000 57,300,000 103,040,000 188,860,000 273,500,000 424,220,000 482,220,000 368,290,000 431,760,000 1,299,800,000 1,275,370,000 1,064,470,000 798,130,000 786,650,000 686,360,000 537,270,000 562,920,000 576,490,000 415,680,000 275,460,000 885,970,000 938,320,000 424,390,000 309,480,000 372,030,000 539,130,000 506,580,000 462,380,000 411,360,000 432,050,000 552,450,000 449,020,000 536,810,000 1,247,760,000 601,510,000 668,060,000 579,980,000 (continued )

106

Table I. Jordans external debt and aid

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Series 2007 2008 2009

Total debt service (percentage of exports of goods, services and income) 6 16.9 18.2

Time External debt stocks, total (current US$) 8,367,733,000 6,794,000,000 9,432,800,000

Ofcial development assistance and ofcial aid (current US$) 504,460,000 742,220,000 780,435,000

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Table I.

Source: 2009 The World Bank Group, Global Development Finance

4.1 The selection of the case studies Each country has its own accounting regulatory body, which regulates the preparation and publishing of nancial statements, according to the countrys rules and regulations. In the UK, for instance, regulation has traditionally been based on the accounting profession; the Accounting Standards Board (ASB), which requires use of the IFRS. This approach is indirectly supported by the government via Company Law requiring compliance with the rules set by the ASB. In some other countries, a government department has the responsibility of determining accounting policy in the country. In Jordan, the government has the responsibility of deciding accounting policy. Jordans accounting regulatory regime (regulators) consists of the following: . Jordan Securities Commission (JSC); . Central Bank of Jordan (CBJ); and . the Insurance Commission (IC). all of which mandate the use of IFRSs. The researchers tried to ensure that the selected case studies would consist of all institutions that inuence accounting practices and regulations in Jordan either directly (JSC, CBJ, etc.), or indirectly, by those governmental institutions that inuence the economic and nancial policy of Jordan which in turn inuences its accounting policy, such as the Ministry of Industry and Trade, and this was the main factor that inuenced the researchers choice of appropriate cases. However, the researchers also ensured taking into account the opinion of other parties that are involved in affecting accounting in Jordan, such as universities and professional bodies (JACPA). Consequently, the research case studies can be considered to be to some extent representative and provide reliable information. Table II shows the prole of respondents representing the parties determining accounting regulation, education and practice in Jordan. 4.2 Pilot study Early on in the research, the researchers undertook two exploratory interviews as a pilot study, prior to conducting the major empirical research (semi-structured interviews). The process began in May 2009 when prominent accounting professors who are members of the Applied Science University\Department of Accounting and The Hashemite University were interviewed over the phone and face to face, respectively. In addition, the researchers conducted brief interviews with some members of the Jordan Islamic bank. These interviews concentrated on whether or not Islamic banks and

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Interview code Aca.A.1 Aca.A.2 Aca.A.3 Aca.A.4 Aca.A.5 Aca.H.6 Aca.H.7 Aca.H.8 Aca.H.9 Aca.H.10 Aca.H.11 Aca.H.12 Gov.MOF.1 Gov.MOF.2 Gov.MOF.3 Gov.MOF.4 Gov.CBJ.5 Gov.CBJ.6 Gov.CBJ.7 Gov.CBJ.8 Gov.MIT.9 Gov.MIT.10 Gov.MIT.11 Gov.MIT.12 Gov.JSC.13 Gov.JSC.14

Institution The The The The The The The The The The The The The The Applied Science University Applied Science University Applied Science University Applied Science University Applied Science University Hashemite University Hashemite University Hashemite University Hashemite University Hashemite University Hashemite University Hashemite University Ministry of Finance Ministry of Finance

Job title/department Full professor/head of department Full professor Full professor Associate professor Associate professor Assistant professor/head of department Associate professor Associate professor Associate professor Full professor Assistant professor Full professor Senior accountant/treasury department Director/directorate of study and economic policies Head of revenue/directorate of public revenue Senior accountant/government nancial management information system Senior management Executive manager/banking supervision department Executive manager/domestic payment & banking operations department Executive manager/currency issue department Senior management/nance and commercial accounts director Executive manager/economic policy and consultation director Executive manager/foreign trade policy and relations Director/industrial development Senior management/national nancial centre Senior management/mutual fund and investment Head/Amman Stock Exchange Chairman/the board of directors

108

The Ministry of Finance The Ministry of Finance The Central Bank of Jordan The Central Bank of Jordan The Central Bank of Jordan The Central Bank of Jordan The Ministry of Industry and Trade The Ministry of Industry and Trade The Ministry of Industry and Trade The Ministry of Industry and Trade Jordan Securities Commissions Jordan Securities Commissions

Gov.JSC.15 Jordan Securities Commissions Ind.JACPA.1 The Jordanian Association of Certied Public Accountants

Table II. List of interviews

Notes: Clarication: Aca. academic case; Gov. government case; H The Hashemite University; A Applied Science University; CBJ The Central Bank of Jordan; MOF The Ministry of Finance; MIT The Ministry of Industry and Trade; JSC The Jordan Securities Commission; JACPA The Jordanian Association of Certied Public Accountants; numbers (1,2,3,4,. . .11,13, etc.): are used as it relates to the interviewee of the case studies, for instance, CBJ.5 means that the interviewee is senior management/from the Central Bank of Jordan

other Islamic nancial institutions in Jordan need personnel that are qualied and prepared by academic institutions to work in such institutions. The pilot study revealed that there is a signicant need for developing Islamic accounting, particularly for Islamic nancial institutions. Also, it revealed that the Islamic sector in Jordan representing banking and insurance companies, does pay a high cost to train and teach its new

employees to work in such an Islamic system, and this difculty could be resolved if policymakers, accounting academics and professionals in Jordan were to take this issue more seriously. 4.3 Carrying out the main interviews During the period of six months from August 2009 to February 2010, 28 semi-structured interviews were conducted, lasting between one and one and a half hours each. All the interviews were carried out face to face. Most of the interviews were tape recorded and all were transcribed, translated from Arabic to English and then coded using the Nvivo-7 software package for qualitative data analysis. Following initial contacts by telephone to determine the willingness of the respondents to participate, a letter of introduction was provided, outlining the purposes and objectives of the research study. In general, the researchers started the interviews by thanking the interviewee for taking part in this study. Permission to record the interviews was sought and received. The researchers also assured the interviewees of complete condentiality and that no single identity would be identied if they so wished; however, the organizations whose members were interviewed were identied. All the interviews were carried out in the ofces of the interviewees. At the end of the interviews, most of the interviewees asked the researchers about the possibility of providing them with the results of the study, which the researchers were very happy to do. The researchers ended the interviews by asking the interviewees if there was anything they wanted to discuss, or if there was any document which would enhance the validity and reliability of the data and later the research ndings, as well as asking them whether they accepted the idea of being sent texts of their interviews to check whether or not the researchers had correctly understood their point of view. The interviews were concluded by the researchers expressing appreciation and thanking the interviewees for their help. Besides conducting interviews, a review of relevant documents and ofcial web sites of the institutions involved was also undertaken in order to provide triangulation and thereby increase the validity of the ndings. The results of the interviews were analyzed using Nvivo software in order to identify any patterns emerging both within and across cases. 4.4 Data management and the analysis process According to a number of inuential qualitative researchers (Miles and Huberman, 1994; Yin, 1994), data management and qualitative analysis are based on three elements: (1) data reduction; (2) data display; and (3) conclusion drawing/verication. Naturally, after nishing any empirical eld study, a large amount of data will have been obtained. This fact made it necessary for the researchers to be well organized in dealing with the data obtained, in order to keep track of the data and make it easier and more manageable to work with. This was the rst step in the data analysis. The transcription and initial analysis of the interview data was carried out directly after each interview, which allowed the researchers to engage with the data provided by the respondents, link that to other documental data obtained from different sources and, importantly,

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enhance the ability of the researchers to concentrate on some issues that needed more clarication in the next interviews, which would ll the gaps and resolve any ambiguities that might be found in the data collected previously. A signicant step in data reduction after the transcription stage was to code the data. Miles and Huberman (1994, p. 58) recommend the following:
One method of creating codes the one we prefer is that of creating a provisional start list of codes prior to eldwork. That list comes from the conceptual framework, list of research questions, hypotheses, problem areas, and/or key variables that the researcher brings to the study.

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The interview transcripts and documentary data were analysed using a qualitative analysis method of coding and re-coding using the Nvivo 7 software package. A deductive analytical approach using the dependency theory framework generated a set of codes and helped in the identication of themes/important ideas from the data. A relevant theory is one whose (predicted) categories t or come to match the data which can be employed to clarify, predict, and interpret what is going on (Glaser, 1978; Yin, 1994). 4.5 Within-case analysis and cross-case analysis approaches The main aim of this study was to gain a deeper understanding of the particular situation in Jordan rather than statistical generalisation. Thus, the researchers investigated and analysed each case very deeply, using an iterative procedure of reading, coding and noting of patterns and themes. For instance, the transcription texts and documental data that emerged from the CBJ were examined against the testable categories implied by the dependency theory framework, in order to understand what was being revealed, as well as to evaluate the compatibility between the data and the categories of the theoretical framework. This has been applied to all case studies, of course, using the Nvivo 7 software (Figure 1). After examining each case against the theoretical framework, the primary conclusions were drawn. The second strategy of the research analysis was begun using cross-case analysis. In the cross-case analysis process, there is a need for comparable data using common codes, common pattern codes, and common display formats (reporting formats) for each case, as suggested by Miles and Huberman (1994). Thus, the result of each within-case analysis was compared to the results of other cases, to look for comparable and common themes and ideas that cut across cases. In cross-case studies, replication is an important part of the basic data collection effort. Emerging patterns from one case need to be tested in others (Miles and Huberman, 1994, p. 274). This sort of analysis, which combines a replication strategy (case-oriented strategy), that uses the theoretical framework to study each case in depth, and a variable-oriented strategy, that aims to look for similarities and differences between results, is called Mixed strategies (Miles and Huberman, 1994). These processes can be applied straightforwardly using Nvivo 7. 5. The empirical ndings The research ndings were analysed with respect to their conformity to the competing possible explanations for the situation in Jordan. This analysis revealed the following.

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Note: n is the number of case studies

Figure 1. Strategies of the research analysis process

5.1 Ignorance of alternative approaches/isomorphic processes (i.e. copying others due to uncertainty) Our empirical ndings suggest that all respondents were aware that alternative approaches were available, including Islamic accounting:
It would be nice if we had our own accounting system, but this is a very difcult task, particularly for the developing nations with restricted resources and experience (Aca.H.8).

In fact, a number of respondents were sympathetic to the need for an alternative accounting:
In my opinion, the western accounting approach does not suit our values and society. I mean, accounting is a social science; it was created to serve societies. But the question is, is the accounting we use serving our communities? I dont think so. From my point of view, it has been applied to suit the capitalist people and economy, to serve a few groups and the new open economy not the whole community. Thus, we cannot say that accounting in Jordan is appropriate for general Muslims, it is appropriate for those who believe in the capitalist ideas, and who concentrate on how to maximise their wealth (Aca.A.3). We would expect to nd accounting that ts the nature of the economy or business which it represents. Thus, in Jordan, how can you expect to nd Islamic accounting or accounting thats based on Islamic principles either in the academic, professional and government eld while our economy is reecting the philosophy of capitalism, not because of our choice but

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because we found ourselves in this situation as a result of various historical, economic and political reasons (Aca.H.9).

None of the respondents suggested that adoption of IFRS was due to copying others as a result of uncertainty. There was no evidence of IFRS adoption in Jordan being the outcome of the sort of isomorphic processes suggested in the NIS literature.

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5.2 Minimisation of cost of capital Not a single respondent mentioned the possible advantages to Jordans companies of a reduced cost of capital resulting from their adoption of IFRS. This possible explanation can, therefore, seemingly be discounted. 5.3 Rational choice theory A couple of respondents mentioned the cost-benet calculus argument:
If we want to create a new accounting system, Jordanian or Islamic accounting no matter what you call it, there are a lot of barriers and difculties. Who will bear the very high cost of this task, taking into account the limited nancial resources, who will design it? Promote it? And approve it? And how can we convince everyone, such as the foreign investors and donors, that this is the appropriate system? And how can we deal with other parties whose help and assistance we need, while we are using different systems or principles!! It would be nice if we had our own accounting system, but this is a very difcult task, particularly for the developing nations with restricted resources and experience (Aca.H.8). The adoption of western accounting is to save cost and efforts that should be spent in order to develop Jordans own accounting system, considering the limited nancial resources and poor economy of Jordan. This application of IASs (i.e. IFRS) will benet the Jordanian economy and people in general, by making Jordans economic and nancial system more reliable and attractive. It will enhance the integration of Jordan into the global economy and encourage the international nancial institutions/donors to provide Jordan with the required fund[s] and assistance (Gov.MOF.4).

This case (interview) appears to be very limited in support of the economic dependency argument, by apparently emphasising the cost-benet calculus argument. However, this interview produced a clear contradiction and inconsistency. In the beginning the interviewee denied the impact of international aid and the donors on accounting policy, but later, the respondent stated that the adoption of a Western accounting approach would help Jordan to get international loans/aid; he said: this application will [. . .] encourage the international nancial institutions/donors to provide Jordan with the required fund[s] and assistance. Moreover, the rational choice theory, or cost-benet calculus argument, presumes that individuals have a certain amount of freedom to choose/decide a particular course of action. The question is, was this the case when Jordan adopted a Western accounting approach? Had the policymakers who are responsible for setting accounting policy in Jordan, a freedom/alternative to choose/decide which sort of accounting should be adopted and would reect Jordans economy and needs? According to the research evidence, the accounting and nancial system in Jordan had been formulated by British colonisers, and this still affects the essence of current Jordanian accounting policy. This means that policymakers did not decide to choose which accounting should be put into practice as they had no freedom to do so. Therefore, this case has not provided a convincing argument or a strong explanation in support of any one of the competing explanations of the situation in Jordan, identied earlier in this paper.

5.4 Economic dependency The ndings from these case studies indicated predominantly that the most signicant factor inuencing accounting regulators in their mandating of IFRS was economic dependency on the west. All respondents conrmed the need to employ an accounting and nancial system that is acceptable to donor countries and their agencies (the WB, IMF, WTO and USAID). These organizations all require adoption of IFRS as a condition of aid/assistance. All respondents (except as indicated above, Gov. MoF.4, which was contradictory) insisted that this was by far the most important factor inuencing accounting policy in Jordan:
Jordan in hard economic circumstances has no choice but to ask international institutions and developed nations for their assistance and help (loans and aid), which in turn, means that they impose different obligations and conditions to be satised by Jordan, such as the adoption of IAS, privatization, global economic policy, etc. Jordan has no choice but to accept these policies to get the necessary funding. He added as I said, we are an economically weak country; we need foreign funding and loans, so we have to accept the conditions of powerful parties and their policies (Aca.A.5). In general, to get foreign aid and required funding, Jordan does need to adopt the nancial and economic approaches of international nancial institutions and donors, to convince the global economy and international parties of the reliability of its nancial and economic policy, thus, Jordan has adopted the IAS as its accounting system in addition to other international policies which already have been developed and employed by those developed states and donor parties (Gov.JSC.13). Jordan is a heavy beneciary of foreign aid and dependent on it to cover, for instance, governmental budget decits. This crucial need forced Jordan to meet the international requirements of the international organizations and countries. Thus, Jordan must correspond with and adopt different international policies and criteria, in order to encourage the donors to help Jordan through nancial aid and assistance. For instance, the World Bank and International Monetary Fund have required all their members and those countries that asked them for assistance to adopt the International Accounting System besides many other obligations (Gov.MOF.2). Jordan, like many developing poor nations, has to obey the international institutions, such as the WB, IMF and WTO, and adopt a number of strategies to accomplish its commitment towards these global organizations, to get the necessary funds and to follow its dream of improving and developing the Jordanian economy and peoples lives (Aca.H.12).

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As the above quotes indicate, the provision of assistance and aid given by international institutions to the less developed nations relies on the willingness of these countries to undertake various social, cultural, economic and political changes. In 1999, the WB and IMF instigated the mutual Reports of the Observance of Standards and Codes initiative. This covers 12 areas and associated standards that need to be adopted by countries receiving aid, including the area of Accounting and Auditing. This mandates the adoption of the IASBs accounting standards and the International Federation of Accountants International Standards on Auditing. The WTO also encourages the adoption of IFRS (1996). Effectively, the WTO works with the WB and IMF to enforce adoption of IFRS by its members:
Different organizations and institutions, such as the IMF, WB, WTO and USAID, have played a signicant nancial and technical role in deepening and enhancing Jordans adoption of

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international economic and nancial policies. Normally, for example, the IMF and WB send some groups to member states, to review, monitor and observe their nancial and accounting system and annual economic developments (Gov.CBJ.7).

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Thus, Jordan has been guided by various international institutions that work complementarily, in reforming its economic, legal and nancial system to suit the plans and agendas of a global economy. For instance, Jordan is obliged to integrate the arena of the global economy and open market and adopt the structural-adjustment program (SAP) specied by the IMF and WB. This has a great impact on the way accounting is regulated and operated in Jordan:
In Jordan, the World Bank is concerned with reforming the public sector. Thus, the Public Sector Reform Loan II (PSRL II) has been designed by the World Bank, which specied a signicant amount of its nancial assistance, which concentrated on programming and budget preparation, civil service and administrative reform, expenditure and judicial reform (Gov.JSC.14). To fully and properly implement privatization and the policy of an open economy, and guarantee its accomplishment, Jordan renovated and created different laws and regulations, such as the 1997 Company Law, the 2002 Securities Law and established three institutions ( Jordan Securities Commission, the Amman Stock Exchange, and the Securities Depository Commission) which are responsible for several tasks, one of them being the setting and enforcing of accounting regulations, which in turn has led fully to the adoption of the International Accounting Standards (Gov.JSC.13).

Furthermore, USAID has assisted the Government of Jordan to satisfy the requirements of the WTO, US-Jordan FTA and foreign investments, through[1]: . assisting with the reform of laws, policies, and institutions to fully support the objectives of Jordans membership in the WTO and its trade agreement with the USA; . providing technical assistance and training to the GOJ, particularly the Central Bank, Ministry of Finance, and trade and investment institutions, to meet market and framework demands; . creating new laws and institutions that can provide efcient and effective public services for investors; . encouraging the continued development of laws, policies, and institutions that are responsive to private sector issues, particularly those of the nancial and capital markets; . providing technical assistance and training to support GOJ efforts to modernize its infrastructure and service efciency; . working with key nancial and capital market institutions to introduce more advanced nancial instruments to the market, including tradable mortgages, securitization tools, various securities mechanisms (e.g. mutual funds, futures, swaps), and tradable debt portfolios; . developing strong systems for nancial market regulation, including (anti-)money laundering; and . maintaining support for the GOJs Executive Privatization Units efforts to privatize state-owned companies.

In summary, the adoption and persistence of a Western accounting approach (and specically IFRS), and the failure to detect a signicant impact of Islam on accounting practices/education in Jordan, even after independence, is a consequence of Jordans dependency relationship with Western capitalist countries, and Jordans integration into the global economy, in the interests of those capitalist countries. Jordans signicant need for international aid and loans has been exploited by developed Western nations and their agencies to compel Jordan to integrate into the global economy and adopt/fulll different international policies/obligations, such as the policy of open economy, privatization and so on as a strategy for serving/securing the capitalist and geopolitical interests of Western capitalist nations. This has been achieved by various mechanisms (the stick and carrot strategy) such as international aid, loans, trade agreements, debt amnesty, open economy and foreign investment, which are created and developed by Western nations as part of their geopolitical and capitalist exploitation and interests:
Jordan has adopted or rather has been compelled to apply different economic and political changes as a result of the insistence of international organizations, such as the World Bank and the International Monetary Fund on furthering and demanding the use of such policies. These policies have done more damage to our society instead of enhancing and developing its circumstances. From my point of view, if developing countries, such as our country, had developed their own programmes and policies depending on their national circumstances, I think the result would be much better than now, and ensure we would have kept our dignity and freedom, which we have lost owing to international institutions (Aca.A.4). The WB, IMF, WTO, etc. have been founded to serve the interests of specic capitalist groups, to draw the world economy into becoming a promoter of some countries to the disadvantage of others. This fact has contributed to controlling the choices and capacities of Jordan and limiting its alternatives for developing or adopting the relevant accounting and economic policy that reects the values of Muslims in this country (Aca.A.4).

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Jordans forced integration into the global economy has inuenced accounting policy in Jordan in two ways: (1) Directly: the adoption of Western accounting is considered an important step to accomplish Jordans integration into the global economy and satisfy the requirements of the international nancial institutions such as the WB, IMF, WTO, MNCs and dominant partners (such as the USA). (2) Indirectly, Jordan is still unable to develop or adopt its own economic and accounting policy that reects the indigenous values and demands of Jordanian people, as a result of the negative outcomes of this integration, which has strengthened Jordans dependency on the Western agencies, and impacted negatively on its economic and nancial circumstances. Jordans economy and its limited natural resources are now under the control of Western multinational corporations and international nancial institutions. As a result, accounting and economic policies in Jordan symbolize the values and principles of the capitalist system and the objectives of dominant nations and their agencies. 5.5 Colonial legacy All respondents in both the governmental and academic case studies agreed that the origin of the dominance of Western accounting in Jordan is to be found in the colonialism era:

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Talking about accounting in Jordan is the same as talking about accounting in the Arab Middle Eastern countries that shared the same history and circumstances. Jordan, like many other developing and Islamic countries, was under the control of western colonial powers. Those colonizers did employ their accounting approach in their colonies, which affected and inuenced accounting in these nations, and even after independence, the colonial experience still affects the accounting system and other systems such as economy and politics (Gov.MIT.9). The long-lasting Western colonial control and power in the region has formed accounting systems in this area as well as the nancial system and company law. Nowadays, the accounting system in these countries still continues to represent and symbolize western accounting values and principles. On the other hand, colonial history and its impact on Jordan, as well as other developing countries, has formulated the type of politics, economy, education, etc. (even after independence) which also participated in strengthening the domination and superiority of western accounting in these regions, up to today, and restricted the opportunity of Jordan and other developing countries to develop their own accounting system that suits and represents their cultural, economic and social values (Aca.H.9).

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6. Conclusions and future research directions The empirical ndings of this research suggest that the adoption and persistence of a Western accounting approach and the failure to detect a signicant impact of Islam on accounting (professional or academic) in Jordan is a consequence of Jordans integration into the international capitalist economic system, which has been enforced by Western countries and their agencies (the WB, IMF, WTO and USAID). The fact of economic dependency on the west has forced Jordan, or rather has left Jordan with no alternative but to take certain steps (such as an open economy, free trade, privatization and foreign investment) favorable to the interests of international nancial institutions, such as the IMF, WB, WTO and multinational corporations, even if these steps are not appropriate for Jordans culture and values, economy and environment. As a result, Jordan is still unable to develop or adopt its own economic and accounting policy that reects the indigenous values and demands of Jordanian people. On the contrary, Jordans economic and accounting policy is reecting and meeting the demands and priorities of the agencies of Western developed nations. This study, although providing valuable insights, has of course its limitations. One signicant limitation is the uncertainty concerning the extent to which the views expressed by the respondents in interviews, are representative of the accounting regulators in Jordan as a whole. Another is an inevitable degree of subjectivity in interpreting the ndings, particularly with respect to evaluating the relative impact of economic dependency and other factors (for example the cost-benet calculus) on accounting policy in Jordan. There are several areas for future research that are suggested by the current study. First, it would be interesting to investigate further the mindsets of those people who inuence the accounting system in Jordan, such as the respondents of the government and academic case studies, regarding their enthusiasm or apathy towards the adoption of Islamic accounting. This could contribute to an exploration of potential prospects for and barriers to developing Islamic accounting professionally and academically. Second, it could be benecial to investigate the possible impact of the adoption of Islamic accounting, economy and nancial products such as Islamic bonds, mudarabah, murabaha, musharakah, on Jordans economic performance, by comparing the results of the adoption of a conventional approach and an Islamic one. This future study may

advance and encourage the attempts to develop Islamic accounting in particular and the economy in general. Third, the case ndings indicate that economic dependency on the west is the most signicant factor determining accounting in Jordan and thereby provide a platform for a future research agenda. Using the research design employed by this study, replication and extension of the ndings may be sought in other developing countries as part of the process of theory development. As a matter of fact, Jordans economic situation has deteriorated, rather than improved, during the period during which the Western demands concerning economy and accounting have been implemented. Is this evidence of a cause and effect relationship and hence evidence of a deliberate policy by Western countries to keep developing countries poor in order to continue, post independence, economic exploitation of these countries? Future research could explore whether neocolonialism/dependency theory can explain the current situation in Jordan.
Note 1. USAID/Jordan Strategy 2004-2009: USAID Mission to the Hashemite Kingdom of Jordan Strategic Direction of the US Foreign Assistance Program Gateway to the Future 2004-2009. References Allingham, M. (2002), Choice Theory: A Very Short Introduction, Oxford University Press, Oxford. Annisette, M. (1996), Imperialism and the professions: a case study of the development of the institute of chartered accountants of Trinidad and Tobago, unpublished PhD dissertation, University of Manchester. Annisette, M. (2000), Imperialism and the professions: the education and certication of accountants in Trinidad and Tobago, Accounting, Organisations and Society, Vol. 25, pp. 129-48. Ashraf, J. and Ghani, W. (2005), Accounting development in Pakistan, The International Journal of Accounting, Vol. 40, pp. 175-201. Bakre, O.M. (2005), First attempt at localising imperial accountancy: the case of the institute of chartered accountants of Jamaica (1950-1970), Critical Perspectives on Accounting, Vol. 16, pp. 995-1018. Bakre, O.M. (2006), Second attempt at localising imperial accounting: the case of the institute of chartered accountants of Jamaica (1970s-1980s), Critical Perspectives on Accounting, Vol. 17 No. 1, pp. 1-28. Balachandaran, B. (2007), Western imperialism and eastern accounting: the story of Chartered Institute of Management Accountants in Sri Lanka, Rivesta Facultad de Ciencias Economicas: Investigacion Y Reexion, Vol. XV No. 2, pp. 9-27. Briloff, A. (1990), Accountancy and society a covenant desecrated, Critical Perspectives on Accounting, Vol. 1, pp. 5-30. Briston, R. (1978), The evolution of accounting in developing countries, International Journal of Accounting Education and Research, Vol. 16, pp. 12-26. Briston, R. (1990), Accounting in developing countries: Indonesia and the Solomon islands as case studies for regional co-operation, Research in Third World Accounting, Vol. 1, pp. 195-216.

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Carneige, G.D. and Parker, R.H. (1999), Accountants and empire: the case of co-membership of Australian and British accountancy bodies, 1885 to 1914, Accounting, Business & Financial History, Vol. 9, pp. 77-102. Cooke, T.E. and Wallace, R.S.O. (1990), Financial disclosure regulation and its environment: a review and further analysis, Journal of Accounting & Public Policy, Vol. 9, pp. 79-110. Cooper, D.J. (1980), Discussion of towards a political economy of accounting, Accounting, Organisations and Society, Vol. 5, pp. 161-6. DiMaggio, P.J. and Powell, W.W. (1983), The iron cage revisited: institutional isomorphism and collective rationality in organizational elds, American Sociological Review, Vol. 48, pp. 147-60. Dos Santos, T. (1971), The structure of dependence, in Fann, K.T. and Hodges, D.C. (Eds), Readings in US Imperialism, Porter Sargent, Boston, MA. Forrester, D. (1996), European congress of accounting, European Accounting Review, Vol. 5, pp. 93-101. Glaser, B.G. (1978), Theoretical Sensitivity: Advances in the Methodology of Grounded Theory, Sociology Press, Mill Valley, CA. Gray, S.J. (1988), Towards a theory of cultural inuence on the development of accounting systems internationally, Abacus, Vol. 24 No. 1. Hameed, S. (2001), Islamic accounting accounting for the new millenium?, paper presented at the Asia Pacic Conference, Kota Bahru, Kelantan. Haniffa, R. and Hudaib, M. (2010), The two Ws of Islamic accounting research, Journal of Islamic Accounting & Business Research, Vol. 1 No. 1, pp. 5-9. Hopwood, A.G. and Miller, P. (1994), Accounting as Social and Institutional Practice, Cambridge University Press, Cambridge. Hove, M. (1986), The Anglo-American inuence on international accounting standards: the case of the disclosure standards of the international accounting standards committee, Research in Third World Accounting, Vol. 1, pp. 55-66. Janesick, J. (1998), Stretching Exercises for Qualitative Researchers, Sage, Thousand Oaks, CA. Lehman, C. and Tinker, T. (1987), The real cultural signicance of accounts, Accounting, Organisations and Society, Vol. 12, pp. 503-22. Leuz, C. and Verrecchia, R.E. (2000), The economic consequences of increased disclosure, Journal of Accounting Research, Vol. 38 No. 3, pp. 91-124. Loft, A. and Aggestam, C. (2007), Governing accounting beyond the state: the WTO and the construction of a world without walls for accounting services, working paper, Lund University and Copenhagen Business School. Lucas, M. (2005), Pricing decisions and the neoclassical economic theory of the rm: management accounting practice in the context of a realist methodology and research strategy, unpublished doctoral thesis, University of Buckingham. McKinnon, J.L. (1986), The Historical Development of the Operational Form of Corporate Reporting Regulation in Japan, Garland, New York, NY. Miles, M.B. and Huberman, M. (1994), Qualitative Data Analysis: An Expanded Sourcebook, Sage, Beverley Hills, CA. Miller, P. and OLeary, T. (1987), Accounting and the construction of the governable person, Accounting Organisations and Society, Vol. 12, pp. 235-65. Neu, D. (1999), Discovering indigenous peoples: accounting and the machinery of empire, Accounting Historian Journal, Vol. 26, pp. 53-82.

Nobes, C.W. (1998), Accounting in Developing Economies: Questions About Users, Uses and Appropriate Reporting Practices, ACCA, London. Poullaos, C. and Sian, S. (Eds) (2010), Accountancy and Empire: The British Legacy of Professional Organization, Routledge, New York, NY. Samuels, J.M. and Oliga, J.C. (1982), Accounting standards in developing countries, International Journal of Accounting, Vol. 18 No. 1, pp. 69-88. Scott, D.R. (1931), The Cultural Signicance of Accounts, Henry Holt, New York, NY. Susela, S. (1999), Interests and accounting standard setting in Malaysia, Accounting, Auditing & Accountability Journal, Vol. 12, pp. 358-87. Verhoef, G. (2011), Book review: Accountancy and Empire: The British Legacy of Professional Organization, in Poullaos, C. and Sian, S. (Eds), Routledge, New York, NY, in British Accounting Review, Vol. 43, No. 3, pp. 249-50. Wallace, R.S.O. (1990), Accounting in developing countries: a review of the literature, Research in Third World Accounting, Vol. 1, pp. 3-34. (The) World Bank (2004), Reports on the Observance of Standards and Codes (ROSC). Overview of the ROSC Accounting and Auditing Program, available at: www.imf.org/external/np/ fsap/fsap.asp Yin, R.K. (1994), Case Study Research: Design and Methods, 2nd ed., Sage, Beverly Hills, CA.

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Further reading Annisette, M. and Neu, D. (2004), Accounting and empire: an introduction, Critical Perspectives on Accounting, Vol. 15, pp. 1-4. Ayub, M. (2007), Understanding Islamic Finance, Wiley, England. Bakre, O.M. (2001), The emergence of the accountancy profession in developing countries: the case of Jamaica, unpublished PhD dissertation, University of Essex, Colchester. Bakre, O.M. (2004), Accounting and the problematique of imperialism: alternative methodological approaches to empirical research in accounting in developing countries, Advances in Public Interest Accounting, Vol. 10, pp. 1-30. Dos Santos, T. (1970), The structure of dependence, American Economic Review, Vol. 60. Dos Santos, T. (1973), The structure of dependence, in Wilber, C.K. (Ed.), The Political Economy of Development and Underdevelopment, The American University: Random House, New York, NY. Frank, A.G. (1972), The development of underdevelopment, in Cockcroft, J.D., Frank, A.G. and Johnson, D. (Eds), Dependence and Underdevelopment, Anchor Books, New York, NY. Lehman, G. (2005), A critical perspective on the harmonization of accounting in a globalising world, Critical Perspectives on Accounting, Vol. 16, pp. 975-92. Miller, P. and Rose, N. (1990), Governing economic life, Economy and Society, Vol. 19, pp. 1-31. Modelski, G. (Ed.) (1979), Transnational corporations and world order, Readings in International Political Economy, W.H. Freeman and Company, San Francisco, CA. Prebisch, R. (1950), The Economic Development of Latin America and Its Principal Problems, United Nations, New York, NY. Salibi, S.K. (1998), The Modern History of Jordan, Tauris & Co, London. Scott, D. and Usher, R. (1999), Researching Education, Cassell, London. Seale, C. (1999), The Quality of Qualitative Research, Sage, London.

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Tinker, T. (1985), Paper Prophets: A Social Critique of Accounting, Holt, Rienehart and Winston, London. Wijewardena, H. and Yapa, S. (1998), Colonialism and accounting education in developing countries: the experiences of Singapore and Sri Lanka, International Journal of Accounting, Vol. 33, pp. 269-81. Appendix. The interview guide The main issues to be discussed: (1) The economic and historical aspects, as well as the importance of Jordans geographical location in the Middle East to the core countries. (2) The extent of Jordans dependency on international nancial institutions, such as the World Bank and IMF ( Jordans relationship with the agencies of dependency). (3) The extent of Jordans dependency on and relationship with imperialist countries such as the USA in different aspects, such as nancial aid and technological assistance ( Jordans relationship with developed countries). (4) The impact of Jordans integration into the global economy on the economic and nancial policies and affairs of Jordan, mainly their impact on accounting practices. This can be investigated by looking at: . Jordans economy, nancial and accounting obligations and duties towards IFIs and the global economy and the results of these commitments, for example, issuing specic laws or regulations regarding the adoption of international accounting standards, privatization, investment regulations, nancial liberalization and trade liberalization. . The methodology, process or projects of these institutions (WB, IMF, WTO) to monitor and assess the compliance of Jordan with their (WB, IMF, etc.) criteria or requirements, for instance, the Report on the Observance of Standards and Codes (ROSC). (5) Exploring the potentiality for and obstacles to developing or adopting Islamic accounting into the accounting system in Jordan (professionally, academically and in the government). Corresponding author Mike Lucas can be contacted at: m.r.lucas@open.ac.uk

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