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Key research themes
1. How do Islamic principles uniquely shape the accounting practices and financial reporting frameworks of Islamic Financial Institutions?
This theme explores the foundational influence of Shariah and Islamic ethical values on accounting methodologies within Islamic Financial Institutions (IFIs). It highlights how pervasive religious doctrines—such as the prohibition of riba (interest), the importance of zakat (religious levy), fairness, and social justice—mandate distinct accounting treatments, ethical standards, and disclosure practices that challenge conventional accounting frameworks. Given the integral role of accountability to God and community in Islam, this area investigates frameworks that faithfully represent financial transactions in compliance with Islamic laws while ensuring transparency and trust among stakeholders.
Key finding: This paper details that Islamic law (Shariah) imposes a non-divisible sacred-secular framework that influences accounting principles by emphasizing accountability not only to shareholders but also to God and society. It... Read more
Key finding: This study underscores that Islamic accounting is rooted in Quranic injunctions demanding justice, full disclosure, and faithful representation of economic transactions, which transcends the profit-centric focus of... Read more
Key finding: This research highlights four key accounting assumptions critical to Islamic accounting — substance over form, time value of money, fair value measurement, and recognition based on probability — emphasizing their adaptation... Read more
Key finding: The paper systematically reviews the emerging field of Accounting from Islamic Perspectives (AIP), emphasizing the ethical and moral dimensions inherent in Islamic accounting driven by Islamic economic, social, and spiritual... Read more
Key finding: This study demonstrates that Islamic accounting is fundamentally governed by Shariah principles which extend accounting's purpose beyond financial performance to include social justice and equitable wealth distribution. It... Read more
2. What are the challenges and opportunities in developing and harmonizing accounting standards specific to Islamic Financial Institutions globally?
This theme addresses the complexities inherent in formulating, implementing, and harmonizing accounting and auditing standards for IFIs, emphasizing the role of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). It examines challenges arising from diverse national standards, varying interpretations of Shariah compliance, the tension between Islamic accounting ideals and practical convergence toward conventional financial reporting, and regulatory and operational obstacles. Research here focuses on evaluating existing frameworks, the need for exclusive versus harmonized standards, and mechanisms to enhance comparability, transparency, and acceptance of Islamic financial reports worldwide.
Key finding: This paper evidences that while AAOIFI standards serve as pivotal guidelines reflecting IFIs' unique characteristics, global adoption remains partial due to its non-mandatory nature and regulatory disparities. It identifies... Read more
Key finding: This paper echoes prior findings on the incomplete global enforcement of AAOIFI standards and provides empirical data on divergent accounting treatments, especially concerning investment accounts. It highlights the disconnect... Read more
Key finding: By empirically comparing deferred payment Murabahah accounting under IFRS and AAOIFI standards in Pakistan, the study finds no statistically significant difference in qualitative presentation attributes, suggesting... Read more
Key finding: This paper identifies core Islamic banking operational structures that necessitate bespoke accounting considerations, such as unique assets and liabilities (e.g., profit-loss sharing deposits and Murabaha financings). It... Read more
3. How can Islamic accounting frameworks integrate sustainability and governance dimensions aligned with Islamic ethical imperatives?
This theme investigates the incorporation of Environmental, Social, and Governance (ESG) paradigms within Islamic accounting, reflecting Islamic principles of justice, community welfare, and stewardship of resources. It examines emerging models that seek to align corporate sustainability performance with Shariah law, promoting accountability not only in financial terms but also in social and environmental outcomes. This area bridges Islamic economic ethics with contemporary sustainability frameworks, highlighting prospects and challenges in operationalizing a holistic, Islamic-compliant sustainability accounting model.
Key finding: Through systematic literature review, this study proposes an integrated Islamic accounting model that incorporates ESG dimensions consistent with Islamic economic and ethical principles. It finds that embedding ESG within... Read more
Key finding: The research demonstrates that implementing PSAK 109-compliant financial reporting at an Indonesian Amil Zakat Institution improves financial transparency and accountability in managing zakat, infaq, and sadaqah funds. This... Read more
Key finding: This empirical study reveals that organizational culture and structure significantly influence the quality of accounting information in Islamic microfinance institutions when mediated by the accounting information system. The... Read more
Key finding: Using structural equation modelling on survey data, this study evidences that Islamic financial institutions positively impact Halal SMEs development by providing Shariah-compliant financing aligned with Islamic ethical and... Read more