Islamic Banking Accounting Series: Part One : Introduction To Islamic Accounting, #1

Accounting was found in the old human societies, accounting has been known by Greeks, Romans and Muslims. But accounting science that the institutions, governments and individuals dealt with now is a relatively up to date science, the modern methods that is used nowadays in accounting was not found among Muslims, although they have their own ways in accounting. But this does not mean that society or institution that will adhere to the Islamic Shariah controls cannot use knowledge of financial accounting that is used in all existing economic systems. However, this usage should not lead to transcend the limits of Allah Almighty, or to depart on Shariah. For example, the accountants usually share the loss among the partners in the agreed proportions, in which this is contrary to the legitimate rule according to which sharing the loss ratio of the contribution of each party in the funds​[1]. This will lead to a different accounting constraint value in both cases. So, we consider that the financial accounting used by the economic institutions of the capitalist system science is the same science that is used in the contemporary Islamic economic system; the difference arises in the accounting of the processes in which the capitalist economic system violates the Islamic economic system. This means that the launch of the term Islamic accounting on the economic accounting institutions that adhere the provisions of Islamic Shariah does not mean that there is a new science which differs from the financial accounting.This is not strange, as it has been proven that many contracts such as Mudarabah, partnership( Musharakah), Salam, and others existed before Islam​[2].Islam came and preserved the contracts that included people’s benefits after it set controls for these contracts that ensured the achievement of interests, and it prohibited contracts that aroused hatred and resentment among people, such as usury contracts ( Riba Contracts).

––––––––

1-1 Science of financial accounting

One of the researchers defines accounting as a science that serves other economics and its applied fields, it is based on organizing how to deal with numbers that belong to a financial or economic activity that is organized in a scientific and technical way, in essence and width, in the shape and the subject, and it aimed to serve this activity and those who are interested in it, in all directions, and this could be done by supplying a detailed information and data, by concentrating and analyzing, whether this activity related to an individual, group or nation or group.

​[3]

Science of financial accounting can be defined as  a science, which is based on the principles and rules that is used in compiling, analyzing, recording and classifying the financial transaction and present it in order to find a financial results to the project and to know its financial