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Islamic accounting laws or Islamic laws in accounting

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 Islamic Accounting laws or Islamic laws in
Accounting
Mojtaba Rezaei

University of Turin, Italy – [email protected]

Abstract— in the academic and professional circles in accounting, remarkable and powerful nations in the Islamic world, follow
the issue of Islamic accounting has always been challenging and the teachings of Shi'a. In this paper, has been tried to address
controversial. A group of accountants believes that traditional the issue by considering the needs, differences, contradictions,
accounting, based on Western philosophy, cannot meet the and similarities to find a reasonable answer for this question
financial reporting needs in Islamic countries. Therefore, Muslim "Is there a serious conflict between Islamic accounting and
scholars should provide a definition for accounting in Islamic international accounting rules that create a completely new
countries and clarify the reporting requirements by simplifying science as Islamic Accounting? Better expression, Islamic
the goals and characteristics of Islamic accounting. This group accounting standards, or should Islamic accounting be
believes by defining an Islamic framework, a new branch in recognized as a complementary part for accounting? This issue
accounting, that is called Islamic Accounting, is created. is also considered that "the coherence and harmony between
Another group of Muslim accountants insists that there is no the various Islamic ideas and branches are such that the Islamic
Islamic accounting or Western accounting, and any change in accounting standard can be developed for all Islamic countries
accounting in order to standardize it should be in line with the or not"?
needs and demands of users in the country or region and even
specific religious groups. Proponents of this theory say that if II. THEORETICAL FRAMEWORK
there is an independent Islamic accounting, then there may also
be Christian accounting or Jewish accounting. The final opinion Accounting is defined as an integrated dynamic system for
of Islamic accounting opponents is that accounting is accounting. assessing and measuring corporate activities in the field of
business, collecting, processing of data to convert into
Keywords; Islamic accounting, Riba , Ribh, Zakat, Culture. information that is appropriate for reporting and making the
findings available to decision-makers. The result of this
systematic process is the presentation of the documents that are
I. INTRODUCTION called financial statements in the terms of accounting. Usually,
Islam, like other religions, has its own world-view and the best and complete definition of accounting is this simple
system of beliefs but is not confined to individual domains. statement "Accounting is the language of business". However,
Islam is a coherent system for human life in the political, business is not only its financial aspect and there are other non-
economic, cultural, and religious and all other significant and financial aspects but a proper way to realize accounting
influential aspects. Therefore, for Muslims, the separation of definition could be to call it as "The international language for
science and religious guidance is not admissible. Many Muslim financial decisions". Accounting affects many aspects of
scholars believe that the accounting system, which itself is part human life. Certainly, everyone has personal financial
of human knowledge, should be linked with the doctrines of planning. Investments and taxes are just a basic element of life
Islamic religion, and this is what Islamic accounting is called. today. In all of these, there is a trace of accounting. Accounting
Since there are some aspects in of Islamic economics, which knowledge has helped to improve the daily lives of humans.
are largely different with Western economics so accounting
On the other hand, the notion that accounting is only
techniques based on Western economic theory cannot be easily
methods, methodologies, numbers, and financial statements is
applied in an environment of Islamic economics. On the other
also wrong. Accounting includes regular rules and precise
hand, a number of accounting researchers believe that the need
standards that preserve the profession’s purpose and protect the
to use Islamic foundations in Islamic countries is unavoidable,
core objectives. However, this is also wrong, that accounting is
but it is not necessary to codify a completely different standard
an independent island in the sea of science. Many internal and
with the international accounting standards and call it the
external factors are effective in accounting formation. Among
Islamic Accounting Standard. This group states that these
the many studies that have been done in the field of financial
differences are part of cultural and environmental influences on
and accounting in different societies, a series of these studies
accounting that should be considered a part of the accounting
have provided frameworks and models for studying the impact
and not essential as a new science. Another important issue in
of environmental factors on accounting. The results that are
Islam, that can affect the economic system, is the differences
based on two deductive and inductive approaches approve that
between concepts and, in some cases in principals, in two main
accounting development and evolution are affected by various
branches in Islam, Sunni, and Shia. Despite the fact that most
environmental factors, and the most important elements are
Islamic societies follow the Sunni religion, but there are
culture and beliefs. Therefore, this is suggested that in

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 EJIF – European Journal of Islamic Finance No11, December (2018)

structuring of accounting of each country, should be considered in China is very strong, and this control includes accounting
the culture and beliefs of that country. and the way it is applied. Therefore, based on the type of needs
and demands that the government has, and not based on the
The function of international standards is formed by Anglo- need for investors to make decisions, financial statements are
American accounting thought and most of the standards are prepared. The government also owns many companies directly
based on the Western perspective of accounting. But over the or indirectly, which it is another reason for the difference in
past 30 years, a social and political change and complex how the financial statements are prepared. To adapt
network of interlinked economic have contributed to the wealth environmental conditions, the training of managers based on
owned by Muslims and also to their need to make the most of the culture in China and its effects on performance is vital for
this wealth in accordance with the principles of Islam[1]. foreign companies who want to have a branch in China [11].
Moreover, this is correct that the existing standards, which
have been developed according to a conventional framework, Another example about the role of environment and culture
are insufficient to guide Islamic financial organizations on accounting is Germany. Flexibility in the Germans is less
absolutely. Islamic finance has been experiencing a rapid than to what is seen in Americans. This inflexibility has made
growth in banking, capital markets, insurance, and asset the accounting and management system in Germany as highly
management. structured and rigorous. The result of this system is the
adoption of long-term policies for the organization and the
predictability of future performance. The other thing about the
Germans is their precise monitoring. In the United States,
III. THE FOOTPRINT OF CULTURE IN ACCOUNTING unlike Germany, having a high degree of flexibility has caused
The influence of culture on financial accounting has been a the accounting system to be varied from a company to another
significant issue in accounting research as far as the importance and also being more adaptable to changes made in the business
of culture on accounting practices have been a long debate, [12].
especially in the area of international accounting [2]. The
existence of different patterns in accounting systems is shown IV. CONCEPTUAL FRAMEWORK OF ISLAMIC ACCOUNTING
in many attempts. Environmental factors are the best example New accounting issues about the impacts of religion raised
in this field that their considerable influence over the in the 1970s by the combination of religious principles with
development of national systems is noteworthy. Many scholars economic activities initiated by Islamic banking. At first and in
have tried to recognize and found the environmental elements the absence of authoritative guidance, Islamic banks (as the
involved [3], [4]. Violet [5] is the one of first researcher who first Islamic institution) had to develop their own accounting
thoroughly scrutinized culture as an effective drive of variances policies .These policies were to some extent different with
in international accounting. In his review, accounting system western approach. Financial statements of Islamic banks reflect
was considered as a social task (a product of its culture) that is different revenue recognition methods and different
restricted by cultural variables because cultural belief exists classification and disclosure practices [13]. With the boom of
even in the most basic of societies. However, he did not the economy in the middle of the twentieth century, the
categorize different patterns of culture-specific causes that implications of Sharia compliance with accounting and
allow a better realizing of the influence of environmental auditing of Islamic financial institutions received greater
factors on accounting development. attention and became more important. The Sharia is an Arabic
Gray [6] promoted the viewpoint that culture might have word that literally means “the way” or “the path to the water
influence on accounting practices. He used the societal values source”. In Islam, Achieving prosperity is the ultimate goal and
dimensions of Hofstede [7] as cultural elements that are it has been interpreted as al-Falah - happiness in this world and
effective in accounting practices based on the accounting in the Hereafter- in the context of Islam. To achieve this goal, a
values and to test this idea he examined specific hypothesis path has been identified, which is called the Sharia. Whit the
about this relationship [8]. passage of time, it seemed vital to develop the conceptual
framework to guide users in their decision-making. The role
The viewpoint accepted by some researchers about and position of Sharia in the development and growth of
accounting practices is that the specific needs of each country accounting can be reviewed by analyzing the researches made
are the main reason for the type of accounting in that particular in this area.
society [9]. Cohen, Pant & Sharp [10] argue that the
management and accounting of each country is a result of the
feedback of the cultural needs of the country, thus changing In the early 1980s, the initial English-language scholarly
requirements will change accounting practices as well. The article about the accounting problems in Islamic financial
effects of environmental factors on accounting systems in institutions provided Abdel-Magid [14] examines the principles
different countries is such that sometimes the usual accounting of Sharia, which are directly involved in banking affairs, and
practice in one country in another country is illegal. For expresses his assessment of specific accounting treatments
example, one of the most striking differences can be found in needed for these transactions. The main concept of this paper
China. Socialist principles and the influential role of was an essential need for differentiation between Islamic
government have made accounting practices in China different accounting and Western accounting. However, he identified the
from what is seen in Western accounting. Control over society

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possibility of imposing economic and political factors on The conception of accountability in Islam is rooted in the
corporate reporting and accounting standards. Quran that is reference to the principle of accountability,
directly. The most relevant word with accountability in Arabic
Over time and by an increase in demand for Islamic is the word "Hesab" according to the Quranic verses. This word
banking, it was necessary for those banks which offering is repeated more than eight times [17] .To account, in its
Sharia-compliant transactions to develop their own accounting generic sense, counts as one’s obligation to God in everything
policies and practices. These banks also had to prove their that Muslim is accountable and in all matters relating to human
claims to the customers to comply with the Sharia. This was a attempt, generally .The existent resemblance between Hisab in
detailed explanation on how their transactions are actually Islam and account lies in the responsibility of every Muslim to
complying with Sharia principles. The role of religious conduct their religious and non-religious duties referring to the
advisers became more and more commonplace, and banks use Holy Quran. In the research of Nahar and Yaacob [18] it is
them as a major part of their organization chart to plan described that the word "account" in Islam conceptually relates
transactions and provide religious decisions to ensure to humans ’obligations as Allah’s representatives on earth
conformance with Sharia principles. In 1991, with the (Khalifah - vicegerent) and they are responsible directly to
increasing desire of the Islamic private Islamic finance sector Allah in the hereafter on all matters pertaining to their worldly
to new markets, especially the global markets, the need for an endeavors”.
Islamic framework that develops sharia-based standards were
expanded. Therefore ,the first private standard-setting structure Cardinal dogma in Islam is rooted, as mentioned above, in
was set up in Bahrain. the relationship between human and God, and human
accountability to God for their actions and omissions [19].
Western viewpoint emphasizes that accountability is limited to
This structure, originally known as the Financial law only. Consequently, there are no ethical principles such as
Accounting Organization for Islamic Banks and Financial decency, truthfulness, and honesty underlying a man’s acts and
Institutions (FAOIBFI), later became the Accounting and consciousness. The individual attempts to pursue his benefits
Auditing Organization of Islamic Financial Institutions and interest by deceiving and breaking the established rules.
(AAOIFI). Its committee consisted of bankers, accountants, Conversely, Islamic perspective highlights the different
academics, Sharia scholars and members of regulatory bodies. concept of accountability. Judgement in the Hereafter is
identified in terms of weighing one’s good and evil deeds in a
Special attention to socioeconomic justice (al-adl) and its balance. The linguistic stem of the term (Taklif – Arabic)
relationship with accounting standards has presented in a includes the meaning of having to do difficult and burdened
published essay in 2002 by Hudaib and Haniffa [15]. They things generally named obligation. Muslims are obliged to do
describe for all aspects of life, a general horizon of the what Allah asks and avoid what he forbids.
fundamental rules and values of Sharia. In the paper, the term
“Islamic perspective of Accounting” is defined and the issue Accountability and liability refer to the aspects of duty and
that "how Islamic accounting can help to improve the obligation, whereas blame also involves sanctions [20]. Alam
socioeconomic justice indicators" has been discussed. Authors [21] considered the subject of accountability to God and Lewis
seriously criticized methods of AAOIFI that are more technical [22] particularly persevered this consideration by discussing
and their suggestion was a theoretical framework for Islamic two major ethical concepts for Islamic accounting: God’s
accounting based on Sharia. Their main criticism was that the absolute ownership of all resources and humanity’s role as
standards elaborated by AAOIFI, are only fully compliant with God’s representative (khalifa) on earth, granted stewardship of
Bahrain and not outside [16]. God’s possession. The significance of this these concepts are
so much that are known as the root of the contemporary view
V. RELATIONSHIP BETWEEN ACCOUNTING AND SOCIAL of sustainability. Mortuza [23] addressed how financial
accountability and social justice can be reached by adhering to
RESPONSIBILITY
the Sharia principles. He discussed the concept and the roles of
The best and plain definition of accountability can be "Riba", "Zakat" and "Hisbah" and their contemporary
summarized in a few words: accountability is a concept in relevance to social responsibility.
morals that covers numerous ethical behaviors. It involves such
concepts as a responsibility to implement an obligation, Gambling’s [24] societal accounting as a basic source
answerability of what has been done regarding the obligation, influenced on the emerging literature on social accounting.
enforcement, and liability to do the commands, and Gambling and Karim [25] and Tomkins and Karim [26]
blameworthiness in case of disobedience. In Islam as a emphasized the necessity for Islamic accounting Sharia-based
thorough and widespread religion, the essence of the and stress that accounting and business ideas and methods
relationship between the Creator and his creations is a developed in a Western environment influenced by Judeo-
significant aspect. This nature is in the connection between Christian ethical notions would not necessarily operate
humanity and the universe, human relations with their own effectively in a Muslim environment .They distinguish an
society, different societies and humanity as a whole, and the obligation for organizations to be accountable to the Muslim
relationship between humans and their souls. community (the Ummah) and discuss the two elements, which
are considered as influential tenets in Muslim users’ needs
connecting to financial reporting. Two key factors are the

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 EJIF – European Journal of Islamic Finance No11, December (2018)

prohibition of Riba, sometimes interpreted as usury, but more of goods or doing services. This profit, which is an added
usually as all forms of interest, and the fundamental obligation amount on the cost, is normally known as mark-up. This
of all Muslims to pay the religious levy Zakat. "extra" represents a kind of compensation that a trader expects
in exchange for all expenses that he\she has paid for the product
or buy a good or service such as making the effort and taking
the risk to bring a product or a service to market.
VI. RIBA In Riba, by contrast, added amount is to a loan and not to a
Perhaps the prohibition of Riba, is the most effective and cost of a product. Generally, the difference in ways that they
controversial aspect which has influenced many issues in the (Riba and Ribh) are earned is the most important aspect of the
Islamic economics and even western accounting and financial distinction.
economics. Chapra [27] has defined Riba in this way: "In The most important difference about the environment in which
Sharia, Riba technically is recognized as the extra payment the "Riba" occurs with the environment in which "Ribh"
(premium) by the borrower that must be paid to the lender occurs, is defined in a simple word "reality". Trading, investing
along with the principal amount, as a condition for taking a take place in a real economy. In this real economy, people do
loan". There is no doubt about the forbidden (Sharia: Haram) real buying and selling. They (buyers and sellers) experience
Riba from the point of view of the Qur'an and Sunnah in both real risks. Profit achieves in a real economic activity, but Riba
of the important branches of Islam, Shi'a, and Sunni, as far as
does not happen in a real activity. In many cases, there is no
some jurists consider it as one of the essential necessities of
deal. The goods are not actually traded. The actual sale and
religion.
delivery do not occur. The main differences between Riba and
Another definition for Riba is presented by Siddiqi [28] Ribh is shown in below table, briefly.
"Riba is defined as pressure imposed on the debtor at the
maturity of the debt to pay more specified amount in case that
there is no ability to repay the principal amount and added
interest. Chapra [27] in his article has said, "There are various
opinions about Riba, but in general, and according to most
religious scholars, Riba is an unjustified earning that a person
could obtain a monetary advantage without giving a just
counter-value. Riba is prohibited in Islam and this injection
distinctly implies that money that use in this forbidden system
can be, for example, lent legally for either charity aims and
even in managing lawful business based on the partnership in
profit and loss [29]. In Sharia, nevertheless, there is a distinct
different between doing business and Riba. The trade risk is
apportioned equally among all the participants involved in a
deal or trade, but in Riba, risk is connected heavily and directly
to the borrower. Perhaps this simple definition provided by
Ighbal [30] is the most comprehensible definition of Riba "In
its widest general implication, Riba signifies any increase of
capital not justified by a risk taken". Scholars in Islamic
countries have broadly sorted interest "Riba" into two major VIII. ZAKAT
types; the first category is "Riba al-Fadl" that is represented as
an extra in the exchange of two things or goods that have the God possesses all wealth and private property, this is the
same value, unlawfully [31]. Therefore, as to be lawful, the fundamental principle based on the Holy Quran in Islam, and
exchange of identical commodities must occur immediately (on the property has a public meaning and it should be spent on the
the spot) and there must be no difference in amount. usefulness of the Islamic community. Therefore, there must be
a powerful mechanism for the turnover of the wealth in Islam
Most Muslims and most non-Muslim observers of the in order to realize the issue of social justice. For this circulation
Islamic world believe that Islam forbids interest on loans. In of wealth, Islam has established instruments as a law of Sharia.
Islam, unlike other society, the issue of interest is very The most important is a mechanism called zakat. Zakat is a
important. As far as, the second category is directly related to strong device that inherently cause redistribution of income and
this subject "Riba al-nasi'ah" that is associated to extend a wealth is in Islam. The Qur'an has interpreted Zakat as a tool
repayment period of a loan for another payment of money, for the purification of wealth. If we want to compare it with a
artificially [32] financial term in the West, we can say that Zakat is an Islamic
tax. A religious tax, which is deducted from the wealth of those
parts of the community who pay and assign to the poor people
VII. RIBH and is an obligatory charge, one of the five basic practices that
Muslims perform mandatory (in Shia is one of ten).
The best translation of the word "Ribh" is profit, as a result,
Ribh is a reasonable, and legitimate gain is obtained from a sale

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 EJIF – European Journal of Islamic Finance No11, December (2018)

Zakat is payable based on real ownership of productive and unlike Sunni jurisprudence, are limited in certain cases. This
excess assets that have been controlled for a year. As a result, restriction is to such an extent that, in order to include a
temporary acquisitions, impermanent and occasional assets, particular asset that is zakatable, it must also possess its own
and perishable and corruptible goods are not the basis for inherent conditions. In the case of Zakat accounting, the most
calculating Zakat [33]. Another important issue is complete important difference is about the wealth -trading capital - in
ownership. That means, a person own a property entirely and Shia jurisprudence zakat on wealth is not mandatory but in the
nobody else has any claims. In other words, the asset should be Sunni belief, it is.
genuine and without any claim from others. Productive assets
are considered as cash in hand and/or at the bank, stocks,
shares, bonds, inventories of finished goods intended for sale,
Below table (table1) presents some major differences in this
earnings from rented fixed industrial assets and net receivables
(in Shia zakatable assets are limited and this issue is discussed issue.
below(. There are a few exceptions to Zakat's payment, for
example, assets held for daily consumption are not zakatable. Table1:
Sunni2
Generally, in Islamic law, conventional amount of the Zakat is Title Shia1
2.5% of cash or other kind of wealth, which reaches, or Maliki Shafi'i Hanafi Hanbali
exceeds "Nisab", the minimum amount one has to own. Nisab, Is Maturity
as a criterion, identifies that How much the sum of property is as a
Yes No No Yes No
criterion for
required that paying Zakat for a Muslim become mandatory in paying
Islamic point of view. On the other hand, this means that if the zakat?
amount is below the "Nisab" Muslims do not have to pay [34]. Is Zakat
mandatory Yes Yes No No No
for non-
Muslims?
IX. ACCOUNTING PRACTICE AND ZAKAT Is it
necessary Yes
In 1997, Adnan and Gaffikin [35] explored the use of to pay (With No
financial statements to calculate one’s liability for Zakat Zakat
Yes
some Yes (With some
No
scientifically. In this study, they examined most of the personal despite conditions conditions)
having a )
aspects of paying Zakat as a debt. They have studied the issue
debt?
of how these standards can be applied to the rules and methods zakatable zakatable zakatable zakatable
used to calculate Zakat, based on concepts such as the going Not (If it is (If it is (If it is (If it is
Banknotes zakatable more than more than more than more than
concern, historical cost, and periodicity concepts, which are
Nisab*) Nisab) Nisab) Nisab)
existed in the accounting standards. Although they pointed out Gold
that in Islamic accounting, there is a strong realization Not Zakatable Zakatable Zakatable Zakatable
Bullion zakatable
principle; witch must assets held on are to be recorded at
historical cost. Clarke, Craiig, and Hamid [36] reached to this Capital
Not Zakatable Zakatable Zakatable Zakatable
zakatable
conclusion that when accounting statements are suitable for
calculating zakat that to be prepared based on current market *In Sharia (Islamic Law), Nisab is the minimum amount that a Muslim must have before being obliged to
zakat.
values. The obtained results about current value in a model that 1
Hosseini Sistani, Sayed Ali (2016) , Tauzih Al-Masail, available from :http://www.sistani.org/english/ .
Also it can be found on http://fa.wikishia.net/view/%D8%B2%DA%A9%D8%A7%D8%AA
is presented by Baydoun and Willett [37] in the "Islamic 2
Juzairi, Abdul Rahman (2006) Fiqh 'Ala al-Madhahib al Arba'ah
corporate reports" research between 1994 and 2000 were https://archive.org/details/IslamicJurisprudenceAccordingToTheFourSunniSchoolsAlFiqhalaAlMadhahib
AlArbaah/page/n1 . Also it can be found on
comparable to those witch Clarke and colleagues argued. The http://fa.wikishia.net/view/%D8%B2%DA%A9%D8%A7%D8%AA
most important investigation witch was carried out in order to
find a comprehensive mechanism for paying, collecting and XI. CONCLUSION
distributing zakat among the Persian Gulf countries ) members
The demand for an Islamic accounting system in societies
of the Gulf Co-Operation Council (GCC)). This research
and the global economy has increased dramatically.
reveals that the role of the government in organizing the
Noticeably, this need is vital for those institutes and companies
process of collecting and paying zakat is crucial due to some
that operate in the Islamic realm and want especially fulfill the
problems that arise in absence of proper organization.
socio-economic aims according to Sharia [38]. As is said in
this paper, a clear historical presence of Islamic accounting is
X. DIFFERENCES BETWEEN ZAKAT IN SHIA AND SUNNI seen from revelations in the Quran and the practices of the
Prophet. Although it is difficult to identify the historical
There are differences in the Zakat rulings between Shia and
influence of Islamic accounting on accounting, particularly due
Sunni religions, and these differences are such that the question
to the loss of archives over the centuries, but evidence suggests
about the need for Islamic accounting or Islamic accounting
that Islamic accounting has been influential in the development
standards is raised. The most important difference can be found
of Western accounting, including the double-entry system still
in the cases of Zakat. Zakatable assets in Shia jurisprudence,
used today. However, the need for the revival and reformation

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 EJIF – European Journal of Islamic Finance No11, December (2018)

of Islamic accounting is vital. "How to do this revival in 2) In most Islamic countries, trade and business are the
accounting?" this was discussed. Is it need for new accounting same as in other countries, and in many cases the principles of
as a new science or add new standards as needed? commerce are the same, too. Therefore, since coincidence is
It is essential considering environmental issues in Muslim noteworthy, this similarity must also exist in accounting to
countries. The American Accounting Standards Board (FASB) cover all firms.
as a pioneer in the development of theoretical concepts stated 3) The goal of maximizing the profit, if it is in the
that these concepts have been developed for the American framework of the Islamic law, is not an anti-Sharia act for a
economic, political, and social environment. Environmental Muslim. In practice, the motivation to earn profit for Muslim
conditions affect accounting and in a Muslim country, so the with non-Muslims do not seem to be different.
economic environment is based on observance of Islamic
4) In the case of Muslim-specific transactions, it can
values, this economic environment would be effective. The
develop a standard for the completion of common standards,
Accounting and Auditing Organization has developed an
such as those related to Islamic contracts (Uqud (sing. Aqd).
accounting standard for Islamic contracts [39]. Because (As it is done in most Muslim countries)
international standards are not enough in this issue. For
example, accounting for Islamic transactions (Uqud, sing. Aqd) 5) The Zakat payable by a Muslim consist in the quantity
can be raised. The former secretary general of the organization and the sort of assets the individual owns. There is not
believes that these standards are complementary to provided specific recommendations about which kinds of
international standards, not a completely separate and wealth are Zakatable and is not specified percentages to be
independent sector [40]. given. Therefore, there is no consensus on this issue, the extent
From a global perspective, accounting development cannot and type of Zakat vary from one Islamic country to another,
be attributed to a specific region or culture, but accounting is a depending on the type of religion, and sometimes these
process that has been influenced by different cultures in differences are contradictory. Therefore, these contradictions
different periods of history. impede the creation of a single Islamic accounting system. In
other words, these kinds of differences arise from the impact of
As Islamic societies have historically contributed social influences and not only in the type of religion.
significantly to what has been repeatedly called the Western
scientific innovations today. There is nothing in the name of 6) Accounting goals can also be based on the utility of both
Western accounting and Islamic accounting. The practice of decision-making and accountability. In many cases, the
accounting in different regions is different because of various information needed to decide on a response may also be
historical, legal, religious, and cultural factors, just like the appropriate. Because the information is necessary for decision-
differences in scientific innovations that vary from country to making and for accountability, both theoretical concepts must
country due to cultural and historical reasons. In many cases, be covered. Therefore, the emphasis on Islamic response or
these differences have helped to improve accounting accountability in the current business environment is not
accountable.
JIT (Just-in-time) and Kaizen (continuous improvement),
two of the most important ways to increase productivity, have The UNDP (United Nations Development Program) states
been invented by the Japanese, but today they are considered as that the gap in knowledge has increased between Arab
a part of accounting rather than Japanese accounting. Likewise, countries and the rest of the world. This is explained by the fact
it is not doubtful that some of the top Islamic accounting that the sum of one year's translation of a book in Spain is
researchers have a significant contribution to the development equivalent to the same sum of translation in Arab lands in the
of accounting in West, but it should be noted that this millennia .So ,any challenge to prove the separation of
important and influential role has been contributing to the accounting required in Islamic countries with existed
improvement of accounting science, and not just Western accounting, not only does not lead to the advancement of this
accounting. science in Islamic lands, but also results in the isolation and
weakness of Islamic accounting [41].

On the other hand, the main essence of the discussion is Accounting should remain the same accounting and there is
that in the Muslim countries, the information needed by users no need to add the word "Islamic" to accounting for the
is varied, and they are asking for information on issues such as reflection of this need. Because financial accounting mission is,
observing the religious law and calculating Zakat. the provision of information and this information are defined
Nevertheless, and based on the internal point of view in Islamic according to the needs of the users. Hoodbhoy (1991), by
society, there are some cases that do not require converting expressing a statement by Nobel laureate Mohammed Abdul
accounting to Islamic accounting to reflect differences . Salam, states:

1) The purpose of financial accounting is to provide "There is only one global science. Science is an
information for external user needs, and these requirements are international issue and there is nothing in the name of Islamic
partly environmentally. Therefore, environmental issues are science, as Hindu science, Jewish science, and so on."
effective in accounting, and if there is a need for more
information in addition to the usual international information, it
can be provided. REFERENCES

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 EJIF – European Journal of Islamic Finance No11, December (2018)

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EJIF – European Journal of Islamic Finance Editorial Team

Editor in Chief

Prof. Paolo Pietro Biancone, University of Turin, Italy

Editorial Board

Prof. Dian Masyita, University of Padjadjaran, Indonesia

Prof. Abdulazeem Abozaid, Qatar Faculty of Islamic Studies – Qatar
Prof. Ahmad Aref Almazari, King Saud University, Saudi Arabia
Prof. Nidal A. Alsayyed, Inayah Islamic Finance Research Institute, USA
Prof. Roberta Aluffi, University of Turin - Italy
Prof. Ghassen Bouslama, NEOMA Business School - Campus de Reims, France
Prof. Nazam Dzolkarnaini, Salford University, UK
Prof. Kabir Hassan, University of New Orleans, USA
Prof. Khaled Hussainey, University of Plymouth, UK
Prof. Rifki Ismal, University of Indonesia
Prof. Tariqullah Khan, Hamad bin Khalifa University, Qatar
Prof. Ali Khorshid, ICMA Centre Reading University - UK
Prof. Amir Kia, Utah Valley University, USA
Prof. Laurent Marliere, Université Paris-Dauphine France
Prof. Federica Miglietta, University of Bari - Italy
Prof. Hakim Ben Othman, University of Tunis - Tunisia
Prof. Mohamed Ramady, King Fahd University of Petroleum and Minerals, Saudi Arabia
Prof. Mamunur Rashid, Nottingham University, Malaysia
Prof. Younes Soualhi, International Islamic University Malaysia
Prof. Laurent Weill, University of Strasbourg, France

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