Islam and accounting

Muhasabatuna : Jurnal Akuntansi Syariah

Islam as a religion has been placed as an option and also its teachings are used as guidelines in the lives of human beings who embrace it. So that its existence has provided direction in the development of human civilization, especially in the fields of science and technology. The rise of thoughts, discussions and studies on Islamic economics, has had a major influence on the growth of sharia-based business systems in general and Islamic financial institutions in particular. The existence of such a system has been widely experimented with in several countries, such as: Iran, Pakistan and Sudan, as well as Malaysia, and recently Indonesia.

Jurnal Akuntansi & Auditing Indonesia, 2009

Islam has a different worldview which affects the socioeconomic activities of its adherents. As accounting is a social institution which should reflect the nuances of its society and help to achieve its socioeconomic objectives, a different type of accounting is required as compared to the conventional accounting of capitalistic society. Research on Islamic accounting is still at an exploratory stage; its pioneers trying to develop a theoretical framework for Islamic accounting using various methodologies. In common with the development of conventional accounting, the search is on for the objectives and characteristics of Islamic accounting as a foundation on which to lay its principles, conventions, rules and standards. This article explores the emerging issues in this development and searches for patterns in the debate on Islamic accounting theory and evaluate these different methodologies and approaches suggested in the literature used to develop Islamic accounting theory. The writer finds that a number of the proposed objectives and characteristics of Islamic accounting are doubted in meeting the objectives of Islamic teachings.

Critical Perspectives on Accounting, 2009

Much of the theoretical, normative and prescriptive research in Islamic economics, finance and accounting emphasizes the social and moral character of these disciplines. Considering such emphases, this paper critically explores the potential of aspects of contemporary Islamic accounting research and practice to contribute to the critical accounting project in the latter's efforts to achieve more emancipatory and enabling forms of accounting. The paper concludes that minimal critical theorizing, as well as the narrow instrumental and mechanical emphasis of the majority of Islamic accounting research, are indications that Islamic accounting research is diverting from its primarily proclaimed social and moral roles. This is further exacerbated by the uncritical emulation and embracing of conventional accounting operations and standards by so-called Islamic ones. The paper also attempts to identify ways forward for Islamic banking and accounting research to realize more emancipatory praxis.

The Need For The Islamization of Knowledge In Accounting. This article tries to analyze the term “Islamization of knowledge method through accountancy. The economic system and the foundation of philosophy its system may influence the accounting practice that Islamic worldview provides the original source of revelation in a Muslim society by using Islamic literally of being the adherents to Islam due to be vicegerents of god and providing accountability in all aspects. Islam as a way of life, covering all activities and economic activities as accounting as well are only small part of Islam, through Al Quran and Al Hadits. In terms of developing of Islamic accounting system that as social science and institution may provide a way to satisfy its social economic objective in order to meet the benefit in this world and hereafter. Since many scandals and fraudulent in accounting practices, accounting should be Islamized. Hence, Islamic accounting is needed to bring solutions in business and financial activities in order to achieve the objective of Shariah and Islamic goals of maslahah (social benefit).

gave us guidelines regarding all aspects of our life to deal successfully in this earth and to get salvation in hereafter. Accounting is also an integral part of our life. This article gives us an introduction to Islamic Accounting and its contrast to Traditional Accounting. This article also identifies the basic features and objectives of Islamic Accounting, justifies the need for the development of a separate accounting system for the Islamic Organizations, and analyzes the traditional concepts of accounting in the Islamic point of view. The proposition of the article is that the role of accounting and accountants would be more accurate, effective, complete and fair if any firms and organizations follow Islamic accounting.

2004

Choice of accounting and reporting policies influences the allocation of resources and distribution of income to various claimants in the firm's contractual relationships. The conventional policymaking approaches fail to generate a complete picture of the firm's reality because they focus on technical and economic explanations. These approaches ignore the embeddedness of managers in relationships beyond human self that may influence and constrain their choices. More importantly, such approaches eschew moral and religious influences that define what appropriate behaviour is. We argue that based on the Islamic concept of uqud (contracts), the principles of Shari'ah Islami'iah should drive accounting and reporting policies for Muslim managers. Since adherence to Shari'ah Islami'iah is a form of worship, managers must balance between wealth allocation to firm's claimants and to oneself by taking into account the welfare of both fellow humans and also the environment when making choices on accounting and reporting policies. By doing so, Muslim managers are able to fulfil obligations to Allah, society, the environment, and self and to achieve al-adl (socioeconomic justice) and al-falah (success in this world and hereafter).

Purpose – This paper aims to determine the importance of the Islamic Accounting in modern era. In particular, the paper analyzes the values of the Islamic principles in the accounting process that prevent the unexpected activity such as fraud, dishonest etc to appear in reality. Arthur Anderson case was a result of the fraudulent activities that lead to its termination. Certainly this kind of case is expecting not to be happened in the future. Design/methodology/approach – The paper adopts the descriptive analysis and elaboration of the important element of the Islamic principles used in the accounting process. Furthermore, this paper attempt to make clear distinction between values underlying the Islamic accounting and that of the conventional accounting. Findings – the comparison of those two systems leads to the conclusion that the value in Islam such as honest, fair, truth (which is important in the Islamic accounting process) has more meaning than the similar value of in the conventional accounting. Hold firmly the Islamic value obviously leads to the decrease fraudulent practices and other unexpected activities. Moreover, it increases the social welfare of the stakeholders as Islam requests people to bring as much as benefit to other community. 1 Practical implication – The implication is that the current conventional modern accounting value must be redefined to bring the stakeholders in getting more benefit and creating less damage to the society. The reporting value should provide information to the stakeholders on the current state of the real condition and provide solution which leads to the increase of the stakeholders' welfare.

2004

KnE Social Sciences, 2020

Objective - Most scholars agree that Islamic accounting should incorporate Al-Quran and Hadith, but they have different perspectives relating to how far accounting to be Islamized. Therefore, this study aims to map the Islamization of accounting based on different approaches and describe the gaps and opportunities of developing Islamic accounting theory. Methods - This study uses meta-aggregation consisting of scoping the focus, selecting previous studies, identifying the data, synthesizing the findings, and producing a synthesized discovery. Results - Findings discovered three main syntheses. First, constructive approach proposes a pure Islamic accounting. Second, contrary to constructive, pragmatic approach adjusts contemporary accounting with sharia. Third, hybrid approach mediates between constructive and pragmatic, which considers Islamic values and social benefits. Conclusion - Each approach has its opportunities to be developed so that they can go through together to compleme...

PSU research review, 2022

Purpose-This paper aims to examine the Islamic accounting research. In particular, the paper extensively investigates the literature on Islamic accounting to understand the issues, contexts, methods and theoretical paradigms thereof. Design/methodology/approach-The study has adopted a literature review approach. It has examined the key journal publications for 30 years in accounting discipline and systematically identified the Islamic accounting papers during 1990-2020. In total, 95 papers were identified until June 2020, and they were thoroughly reviewed to identify the relevant issues, contexts, methods and theoretical paradigms. Findings-The study has found that Islamic accounting papers covered issues of both Islamic organizations (e.g. Islamic financial institutions) and of Muslim countries. The key issues include the regulation and regulatory compliance, annual report disclosures, corporate and Islamic governance, accounting profession, gender, accountability matters, management accounting and control, waqf accounting and zakat management. The study has also observed various normative guidelines from the academics on how the teaching of Islam is enacted in accounting, accountability and governance matters to attain the maqasid al-shari'a, i.e. human welfare, social justice and equity. Research limitations/implications-The study is not empirical. Hence, the limitations of literature review papers are applicable in this case. Moreover, it is possible that this study could not identify some of the important literature on Islamic accounting (such as the papers published in Arabic by the academicians and professionals of Arab world). Practical implications-The study enables both Islamic accounting academics and practitioners to identify the main Islamic accounting issues and realize the importance of Islamic accounting. Social implications-When the author considers Islamic accounting as a social construction and tries to understand the phenomenon through social theories, the author acknowledges the relevance of Islamic accounting in the society in which it operates. It can be noticed from the discussion that Islamic accounting emphasizes on social welfare, balance, equity and providing relevant information to follow the commandments of God. Originality/value-To the best of the author's knowledge, this study is the first to provide a synoptic view on the issues, context, methods and theoretical paradigms of Islamic accounting, while covering major accounting journals in 30 years.