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RECLAIMING THE ACCOUNTS: AN UNDERSTANDING FROM ISLAMIC
PRINCIPLES AND VALUES
Norazita Marina Abdul Aziz
Centre of General Studies,
Universiti Utara Malaysia (UUM)
06010 Sintok, Kedah
Email address: [email protected]
Abstract
Islamic accounting is essential by providing a basis on the Islamic debts and the
justice in the life of the hereafter, which can be referred to Al-Quran, Prophet
Sayings (Al-Hadith) or Ijma’ and Qiyas. The limitation in the Western accounting
has influenced the development of the Islamic Shariah framework in Islamic
Accounting. Since adherence to Shariah Islamiah is a form of worship, the Islamic
accounting framework is thus an act of worship in fulfilling obligations to Allah
(God), society and self as well as achieving Al-Falah (rewards in this world and
hereafter). The paper examines the applicability by revisiting the MASB's Islamic
Accounting project, where it was discontinued in the year 2009 based on a few
reasons stated by MASB. Thus, the paper discusses a holistic view of the underlying
values and principles of the Shari’ah Islami’iah (Islamic teachings) and its
application to the IPA, is defined as an assurance function that seeks to establish
socioeconomic justice through its formalised procedures, routines, objective
measurement, control and reporting in accordance with Shari’ah Islami’iah
principles. In line with this, the Islamic moral values and ethical conduct of an
individual is essential in delineating the relationship of between man and Allah; man
and another man; and lastly man and nature (through the conception of
hablunminnallah, hablunminnas). The ontological position is founded from the
Tawhidic position, which underpins the concept of Oneness of the God.
Keywords: Islamic accounting; Islamic accounting values and principles
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INTRODUCTION
Interestingly, the basic of Islamic debts and justice in the life of the hereafter can be
reflected from the Al-Quran. The understanding of the Al-Quran translation can be
delineated in the following verses in the Al-Quran.
“O you who have believed, when you contract a debt for a specified
term, write it down. And let a scribe write [it] between you in justice.
Let no scribe refuse to write as Allah has taught him. So let him write
and let the one who has the obligation dictate.” (al-Baqarah, 2:282)
“And We place the scales of justice for the Day of Resurrection, so no
soul will be treated unjustly at all. And if there is [even] the weight of
a mustard seed, We will bring it forth. And sufficient are We as
accountant.” (al-Anbiya’, 21:47)
Islamic accounting has becoming an important issue in deliberating and applying the
International Financial Reporting Standards (IFRS) and International Accounting
Standards (IAS) for the Islamic transactions. The Islamic accounting research focus
on the Islamic teachings, law and values in deliberating the Islamic accounting
(Gambling and Karim, 1991; Gambling and Karim, 1986; Haniffa, 2002; Haniffa and
Hudaib, 2004; Lewis, 2001, 2006).
Financial reporting from an Islamic perspective is a process through which
appropriate information is communicated to users and assisted them to assess
whether an entity is operating within the Shariah boundary and fulfilling its
responsibilities to society and the environment, and for users to make decisions that
would persuade the entity to fulfil or to continue to fulfil those responsibilities
(Hameed, 2001; Hamid, Craig, and Clarke, 1993; Haniffa, 2002; Lewis, 2006).
Interestingly, the Islamic transactions have to exclude these elements, which are (i)
elements of interest (riba), (ii) uncertainty (gharar), (iii) gambling (masyir) and (iv)
prohibition of certain goods (such as alcohol and pork) (Lewis, 2010).
Islamic accounting will become an interesting area to be discussed and researched
due to the complexity of business transactions in the modern world (Lewis, 2010). In
the globalisation market, the area of Islamic accounting will provide a broader and
new platform for research to be conducted especially concerning on the applicability
in setting up a new Islamic accounting standards in Malaysia, which is derived
through a Shariah teachings and law. Additionally, it provides an avenue for
undertaking research related to the harmonisation of Islamic accounting standards in
the Islamic countries.
In Malaysia, Islamic accounting standards are regulated by the Malaysian
Accounting Standard Board (MASB). In 2009, they stopped the development of the
Islamic accounting standards in Malaysia as they believe that the values and
principles in Islam is similar to that is being proposed by International Standard
Board (IAS) (MASB, 2011). The MASB will refer to the Shariah Supervisory Board
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and specialist in the area should they encounter any discrepancies pertaining to the
Shariah Compliant (MASB, 2011).
The paper is essential in developing the context and boundaries in the application of
Islamic accounting standards in Malaysia and in the global setting. The in-depth
analysis on the review of the literature will provide an extension to the
epistemological analysis for the Islamic accounting philosophy and assist the
government policy setters in making decision pertaining to Islamic transactions.
Thus, the paper addresses the development of Islamic accounting standards in
Malaysia by specifically identify the historical background of Islamic accounting in
Malaysia and examine the applicability of the adoption of conventional accounting
standard to the Islamic accounting perspectives. The next section elaborates on the
review of literature in Islamic accounting, which is essential in setting up the concept
and boundaries related to the ontological positions in Islamic foundations.
REVIEW OF PREVIOUS RESEARCH
Research on Islamic accounting perspective has becoming an interesting and
debatable area in the recent years (Baydoun and Willett, 2000; Gambling and Karim,
1991; Gambling and Karim, 1986; Haniffa, 2002; Haniffa and Hudaib, 2004; Lewis,
2001, 2006, 2010; Zurina and Nurazalia, 2013). There has been an increasing
emphasis related to the Islamic banking mainly on the applicability of the
conventional accounting principles for the Islamic institutions (Baydoun and Willett,
2000; Gambling and Karim, 1991; Gambling and Karim, 1986; Zurina and
Nurazalia, 2013), economic consequences, the need for separate accounting
standards for Islamic banks, the formulisation of standards Islamic corporate reports,
the historical account of the development of Islamic accounting and the requirements
in the appointment of Muslim accountants in the Middle Ages.
Two early contributions to the Islamic accounting literature, Gambling and Karim
(1986) and Tomkins and Karim (1987), are influenced by the emerging literature on
social accounting, particularly Gambling’s (1974) Societal Accounting. The authors
claim accounting and business ideas and methods developed in a Western
environment influenced by Judeo-Christian ethical notions would not necessarily
operate effectively in a Muslim environment. They emphasise the need for Islamic
accounting to be grounded in Shariah Law. They identify a duty for organizations to
be accountable to the Muslim community (the ummah) and discuss factors, which
they consider likely to influence Muslim users’ needs relating to financial reporting.
Interestingly, the basic of Islamic debts and justice in the life of the hereafter can be
reflected from the Al-Quran. The understanding of the Al-Quran translation can be
delineated in the following verses in the Al-Quran.
“And We place the scales of justice for the Day of Resurrection, so no
soul will be treated unjustly at all. And if there is [even] the weight of
a mustard seed, We will bring it forth. And sufficient are We as
accountant.” (al-Anbiya’, 21:47)
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The conventional accounting is developed under the premise of utilitarianism that
holds the actions in producing greatest amount of goods for a number of people in
the society (Neu, 1992), which leads to greediness (Haniffa, 2002). This rationality
deviates from Islamic perspective and need to be revisited so that it aligns with the
Islamic teachings.
From the limitation of conventional accounting, the Shariah Islamiah is proposed as
the foundation in building a theoretical framework for Islamic perspective
accounting. Since adherence to Shariah Islamiah is a form of worship, the role of
Islamic perspective accounting is thus an act of worship in fulfilling obligations to
Allah (God), society and self as well as achieving Al-Falah (rewards in this world
and hereafter).
Thus, the paper delineates a holistic view of the underlying values and principles of
the Shariah Islamiah (Islamic teachings) and its application to the Islamic
perspective of accounting, which can be define an assurance function to seek in
establishing socioeconomic justice through its formalised procedures, routines,
objective measurement, control and reporting in accordance with Shariah Islamiah
principles.
Therefore, the paper investigates the fundamental principles and values of Islamic
business ethics, the implications of these principles for Islamic accounting based on
Islamic teachings and law.
RESEARCH METHODOLOGY
The study is conducted based on interpretive position1 by undertaking library search
and documentary review in addressing the research questions. The research is
conducted by interpreting the meaning of language and texts, which can be in a form
of reports, articles and manuscripts. The interpretive inquiry employs in order to
provide an understanding of the knowledge in addressing the research questions.
The paper inductively employed qualitative research methodology in contextualising
the Islamic accounting in Malaysia. The Islamic philosophical underpinnings are
based on the contextualisation of the Islamic values and principle, which can be
identified within the Islamic Shariah Framework that evolved from the research
findings. A thematic analysis is conducted to create appropriate themes from various
documentary reviews, which addressed the field of inquiry.
The ontological positions discusses in this paper stem within the contemplation based
on Islamic position, which can be highlighted through the understanding of social
relations among Muslim through the understanding that human relations consists
intangible relations that uniquely relate to the submission of Allah, the one God
(Quran, 51:56)
1 Called qualitative research in some disciplines, it is conducted from an experience-near perspective
in that the researcher does not start with concepts determined a priori but rather seeks to allow these to
emerge from encounters in "the field" (which we define here broadly, to encompass both traditional
in-country fieldwork, domestic and overseas, and textual-archival research).
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Thus, the paper adopts qualitative research to revisit the underpinning principles and
values and discuss the appropriateness of MASB’s action to embed the conventional
principles and values in the Malaysian Financial Reporting Standards (MFRS).
THE ISLAMIC DIVINE LAW FOR ONE’S ACCOUNT
As a comprehensive religion, Islam provides a nature of the relationship between the
Creator and His creations, the nature of the relation between humanity and the
universe, humans’ relations with their own society, different societies and humanity
as a whole (Haniffa, 2002). With related to human, which is considered part of the
“hablumninallah, hablunminannas”, the notion that humans are accountable to God
for their actions and omissions is a central tenet of Islam (Askary and Clarke, 1997;
Haniffa, 2002). Islam reckons all activities of one’s life as being in effect an act of
worship as long as they are within the bounds of conscience, goodness and honesty
(Haniffa, 2002; Lewis, 2010).
There are opinions to exclude religious consideration from the research philosophical
foundations. The novice researcher may find it is irrelevant to consider the religious
thoughts in applying it to financial reporting – an area that they may view as
unrelated to matters of faith.
However, in Islamic thought, there must be comprehensive governance of man’s life
to preserve his innate purity from being corrupted by earthly desires. Hence, all
aspects of life, whether ibadah (relating to worship) or muamalat (relating to
mankind and its environment), must be governed by the teachings of Al-Quran and
As-Sunnah.
Islam provides a nature of the relationship between the Creator and His creations, the
nature of the relation between humanity and the universe, humans’ relations with
their own society, different societies and humanity as a whole, and the relationship
between humans and their souls. Islam reckons all activities of one’s life as being in
effect an act of worship as long as they are within the bounds of conscience,
goodness and honesty (Kotb, 1970, p. 9).
Two early contributions to the Islamic accounting literature, Gambling and Karim
(1986) and Tomkins and Karim (1987), are influenced by the emerging literature on
social accounting, particularly Gambling’s (1974) Societal Accounting. The authors
claim accounting and business ideas and methods developed in a Western
environment influenced by Judeo-Christian ethical notions would not necessarily
operate effectively in a Muslim environment. They emphasise the need for Islamic
accounting to be grounded in Sharia. They identify a duty for organizations to be
accountable to the Muslim community (the ummah) and discuss factors, which they
consider likely to influence Muslim users’ needs relating to financial reporting. This
is an important platform that conform the significance of the study to be undertaken.
In the particular case of financial reporting, proponents of financial reporting from an
Islamic perspective cite Quranic verses such as the following as the basis for
subjecting it to Islamic religious considerations:
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“O ye who believe! When ye deal with each other in transactions
involving future obligations in a fixed period of time, reduce them to
writing; let a scribe write down faithfully as between the parties; let
not the scribe refuse to write; as Allah has taught him, so let him write
...” (al-Baqarah, 2:282)
With the conviction that the recording of financial transactions is a divine
commandment, the field of study known as ‘Islamic accounting’ was created.
Besides this philosophical fundamental queries on Islamic accounting literature,
there are two key elements that are prohibited, which is stated in the Quran that is the
prohibition of riba, sometimes interpreted as usury but more usually as all forms of
interest, and the fundamental duty of all Muslims to pay the religious levy zakat
(Gambling and Karim, 1991).
With related to human, which is considered part of the hablumninallah,
hablunminannas, the notion that humans are accountable to God for their actions
and omissions is a central tenet of Islam. To clarify this, Askary and Clarke (1997)
review words related to accounting that are mentioned in the Qur’an. The word
hisab (account, reckoning) and its derivatives appear more than eighty times in
different verses of the Qur’an. Judgement in the Hereafter is described in terms of
weighing one’s good and evil deeds in a balance, with the good and evil deeds
being recorded in books or registers.
The theme of accountability to God is pursued further by Alam (1998), and
particularly by Lewis (2001), who discusses two important ethical concepts for
Islamic accounting: God’s absolute ownership of all resources and humanity’s role
as God’s representative (khalifa) on earth, granted stewardship of God’s
possession. These concepts support the contemporary idea of sustainability.
It can be seen that Shari’ah Islami’iah is based on two basic sources: the Qur’an
(the word of Allah) and the Hadith (sayings, approvals and actions of the Prophet
Muhammad, peace be upon him (pbuh) during his lifetime). The third source is
Ijma’, a consensus of Muslim scholars and is applied only in the absence of an
explicit answer to the issue in question. The final source is Qiyas, which is
represented in the analogical deductions from the other three sources for
contemporary issues that are not directly mentioned in those sources but have similar
characteristics as those that existed in the past. Once any decision is made by either
Ijma’ or Qiyas, it becomes mandatory and cannot be overruled by future generations
(Zaid, 2000).
Thus, the study proposed to developed an Islamic Accounting theoretical framework
that is based on the Tawhidic position based on the Al-Quran, Sunnah and Ijma’
Qiyas, which covers the Islamic accounting philosophical stances, values and
principles.
The paper will explore the fundamental principles and values of Islamic business
ethics, the implications of these principles for Islamic accounting, and social and
economic responsibility.
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OVERVIEW OF MASB
However, in Malaysia, Malaysian Accounting Standards Board (MASB) is
established under the Financial Reporting Act 1997 (the Act) as an independent
authority to develop and issue accounting and financial reporting standards in
Malaysia. They monitor and provide the standards issued by the MASB legal
authority.
Interestingly, The MASB states they are not aware of any MASB accounting
requirement that violates Shariah. Nevertheless, in the extremely rare circumstances
where there is a Shariah prohibition to a requirement in an MASB approved
accounting standard, that requirement need not be complied with, and MASB will
undertake to issue alternative guidance. This can be seen from the statement release
by MASB in addressing the issues related to the requisition of Islamic accounting
standards in Malaysia.
“We are not aware of any MASB accounting requirement that violates
Shariah. However, in the extremely rare circumstances where there is
a Shariah prohibition to a requirement in an MASB approved
accounting standard, that requirement need not be complied with, and
MASB will undertake to issue alternative guidance.” (Statement
release by MASB)
MASB’s action is inconsistent with the Accounting and Auditing Organization for
Islamic Financial Institutions (AAOIFI). To elaborate, AAOIFI sets accounting,
auditing, governance, ethics and Shariah standards for Islamic financial institutions.
While it is a pioneer in Islamic standard-setting, the MASB is concerned that its
accounting standards may not have been developed based on a conceptual framework
similar to the MASB approved accounting standards. Thus, the MASB has not
approved AAOIFI financial accounting standards for use by entities under its
purview.
If for some reason, there is a matter that is not dealt with by MASB approved
accounting standards, but for which guidance may be found in an AAOIFI financial
accounting standard, an entity may consider the AAOIFI requirement, provided that
it is in accordance with the requirements of Financial Reporting Standards (FRS) 108
on the selection and application of accounting policies.
In general, this would mean that an entity may not apply AAOIFI recognition and
measurement requirements that depart from MASB requirements. However, the
inclusion of additional disclosures required under AAOIFI standards, if appropriate,
may be acceptable.
The inconsistencies emerged between the MASB and AAOIFI, leads to the
discrepancies in Islamic accounting choices and the underpinnings of Islamic
philosophical foundations in setting out the global standards for Islamic transactions.
The irregularities on the adoption of Islamic accounting standards between MASB
and AAOIFI will lead to the failure in harmonising Islamic accounting standards in
the Islamic countries globally.
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Since, MASB claims the Islamic Accounting Standards pronouncement in
unnecessary (MASB, 2011), it is important the study to revisit what has been done
by the MASB in promoting the Islamic accounting principles and values in the
Malaysian Financial Reporting Standards (MFRS). MASB Islamic accounting
pronouncements provide guidance on how the MASB approved accounting standards
are to be applied to Islamic transactions and events. However, MASB do not in any
way validate an entity’s activities as being Shariah compliant.
Therefore, in providing improvement to the problem, the proposal will identify
Islamic accounting context within the Islamic accounting standards setter in
Malaysia, i.e. MASB. The proposal will highlight the Islamic accounting philosophy,
values and principles in order to have a clear direction in the formulation and
construction of the “true” Islamic accounting that can be used worldwide that
delineate from the Islamic fundamental foundation. The detail of the research
objectives and questions is delineated in the following section.
MALAYSIA ACCOUNTING STANDARDS BOARD (MASB)
In Malaysia, Malaysian Accounting Standards Board (MASB) is established under
the Financial Reporting Act 1997 (the Act) as an independent authority to develop
and issue accounting and financial reporting standards in Malaysia. They monitor
and provide the standards issued by the MASB legal authority.
Interestingly, The MASB states they are not aware of any MASB accounting
requirement that violates Shariah. However, in the extremely rare circumstances
where there is a Shariah prohibition to a requirement in an MASB approved
accounting standard, that requirement need not be complied with, and MASB will
undertake to issue alternative guidance.
For example, MASB claims that FRS 108, Accounting Policies, Changes in
Accounting Estimates and Errors, and SOP i-1 provide guidance on the selection and
application of accounting policies in the absence of a MASB approved accounting
standard that applies to a transaction, other event or condition.
MASB utilizes the principles stated in the IFRS and IAS, which management shall
use its judgement in developing and applying an accounting policy that results in
information that is:
i relevant to the economic decision-making needs of users; and
ii reliable, in that the financial statements:
iii represent faithfully the financial position, financial performance and cash
flows of the entity;
iv reflect the economic substance of transactions, other events and conditions,
and not merely the legal form;
v are neutral, i.e. free from bias;
vi are prudent; and
vii are complete in all material respects.
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In making the judgement described, management shall refer to, and consider the
applicability of, the following sources in descending order:
i the requirements and guidance in Standards and Interpretations dealing with
similar and related issues; and
ii the definitions, recognition criteria and measurement concepts for assets,
liabilities, income and expenses in the Framework.
MASB believes that the management may also consider the most recent
pronouncements of other standard-setting bodies that use a similar conceptual
framework to develop accounting standards, other accounting literature and accepted
industry practices, to the extent that these do not conflict with the sources described
above.
MASB claims the Islamic Accounting Standards pronouncement in unnecessary
(MASB, 2009). MASB Islamic accounting pronouncements provide guidance on
how the MASB approved accounting standards are to be applied to Islamic
transactions and events. MASB do not in any way validate an entity’s activities as
being Shariah-compliant.
This indication is detrimental especially when it comes to the explanation and
elaboration concerning the Islamic accounting philosophical stances especially
related to the uniqueness of the Islamic values and principles.
Thus, this proposal will highlight the Islamic accounting philosophy, values and
principles in order to have a clear direction in the formulation of the “true” Islamic
accounting that can be used worldwide that delineate from the Islamic fundamental
foundation.
THE AAOIFI GUIDELINES VS MASB
The Accounting and Auditing Organization for Islamic Financial Institutions
(AAOIFI) sets accounting, auditing, governance, ethics and Shariah standards for
Islamic financial institutions. While it is a pioneer in Islamic standard-setting, the
MASB is concerned that its accounting standards may not have been developed
based on a conceptual framework similar to the MASB approved accounting
standards. Thus, the MASB has not approved AAOIFI financial accounting
standards for use by entities under its purview.
If for some reason, there is a matter that is not dealt with by MASB approved
accounting standards, but for which guidance may be found in an AAOIFI financial
accounting standard, an entity may consider the AAOIFI requirement, provided that
it is in accordance with the requirements of FRS 108 on the selection and application
of accounting policies.
In general, this would mean that an entity may not apply AAOIFI recognition and
measurement requirements that depart from MASB requirements. However, the
inclusion of additional disclosures required under AAOIFI standards, if appropriate,
may be acceptable.
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WHAT COULD HAPPEN IF THE PROBLEM IS NOT ADDRESSED?
Mixture of principles and the ontological and epistemological position will have the
elements that related to the social norms and actions and not directly relate to the
divine law of human conduct and ethical concepts for developing the politic,
economy and social (Haniffa, 2002). Research philosophy need to be based on
Islamic values and principles in deriving to the Islamic conceptual Framework for
the formulation and construction of Islamic accounting standards, which is not
embedded the social norms.
In Islam, the rights and obligations of individuals and organizations with respect to
others are clearly defined by religion, and are neither imposed by secular law that is
exposed to change, nor subject to personal views.
“And how many a city rebelled against the Commandments of its Lord
and His Messengers then we took a severe account from it, and gave it
a horrible punishment.” (al-Thalaq, 65:8)
From an Islamic standpoint, this is considered to make Islam a stronger and more
effective basis for ethical values.
Despite the presence of many schools of thought in Islam, there is agreement on
basic matters of principle (Hamid et. al, 1993, p. 136). The Islamic accountability
considers an organisation to be accountable to God (Allah) and to the communities in
which they operate and have a duty of truthful within the society they engaged in. In
addition, the social responsibilities of an individual within the Islamic context are
derived from the words of God (contained in the Al-Quran); and the good deeds and
sayings (the Sunnah) of the Prophet Muhammad pbuh (peace and blessings be upon
him) (Haniffa, 2002; Lewis, 2006).
Responsibilities of members of society to each other are well defined, do not change
over time and are not affected by different theoretical frameworks. Islam claims to be
a religion relevant for all times and places. In addition, in the Islamic context, the
social responsibilities of individuals that are derived from the word of God
(contained in the Qur’an) and from his prophet Mohammed’s deeds and sayings (the
Sunah) apply in the construction of social engagement in the NGO. The discussion
on Islamic accountability can be seen in a wider perspective that it involves the one’s
relationship with Allah and to other human beings, where Islam considers work to be
part of the worship of God (Haniffa, 2002; Haniffa and Hudaib, 2004).
The relationship to Allah can be considered through the “hisab”, which brings a
universal sense of one’s obligation to Allah and to other mankind. In this viewpoint,
every Muslim has an “account” to Allah, in “recording” all good and bad deeds,
which will continue until the death. And, for Allah, the accounts for all his servants
will be delivered to the mankind on the day of judgement.
“To Allah belongs whatever is in the heaven and whatever is in the
earth; and if you disclose whatever is in your heart or keep it hidden,
Allah will call you to account for it; then He will forgive whomsoever
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He pleases and punish whomsoever He pleases, and Allah is potent
over everything.” (al-Baqarah, 2:284)
The deliberation on the relationship with Allah is stated by Lewis (2006) as the
concept of accountability in Islam is derived from the concept of Tauhid (the unity of
Allah). The concept of the unity of Allah implies total submission to Allah’s will and
following the religious requirement in all aspects of life (Maali, Casson and Napier,
2003). Baydoun and Willett (2000) said that the concept of the unity of Allah gives
rise to different and broader concept of accountability that implied by the Western
models. The verse below reinforces the notion that everyone is accountable to Allah
on the day of judgement for their actions during their lives.
“Allah takes careful account of everything” (Al-Nisa’, 4:86)
Therefore, this theoretical foundation of this paper is based on the Islamic
accountability, which stems the relationship of human and Allah and the relationship
of human to other mankind. By referring to this notion, I believe the paper will cover
the ultimate relationship of ABIM where it involves the relationship of the ABIM’s
members with the Allah that is based on moral imperatives and values in oneself and
the relationship with other community at large.
“Undoubtedly, in the creation of heavens and earth and in the mutual
alternation of night and day, there are signs for men of understanding.
Who remember Allah standing and sitting and lying on their sides, and
contemplate in the creation of heavens and earth; (saying) "O our
Lord! You have not made it in vain, hallowed be You, You save us from
the torment of the Hell.” (Ali Imran, 3:190-191)
From this notion, the paper proposes the important elements that need to be
comprehend in the MASB for proposing specific Islamic Accounting Standards. The
Shariah Islamiah Framework, as summarised in Figure 1, can be referred to as a basis
in addressing the one’s account from the Islamic fundamental position for its
principles and values.
POLITICS:
Syura – Consultation
Khilafa – Succession
Bay’a – Obedience
ECONOMICS:
Zakat – Religious levy
Halal – Lawful means
Nizam – Order
I’tidal – Moderation
Islah – Noble
SOCIETY:
Ummah – Community
Maslahah – Public interest
Dar al-darar – Prevention of
harmful activities
Raf al-haraf – Removal of
hardship in society
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Figure 1: The Foundations of Shari’ah Islami’iah
Sources adapted from Haniffa and Hudaib (2002)
In general, Islamic ethics stems within nine values that are iman (faith), taqwa
(piety), birr (righteousness), ibadah (worship), fardh (responsibility), ikhtiy’ar (free
will), amanah (trust), hablun min’Allah (believe in Allah by conducting the good
deeds and refrain from the wrong doings that stipulated in the Quran and Hadith))
and lastly, hablun min’an-nas (striving for the good mortality), which govern the
relationship between man and Allah, man and man as well as man and nature
(Haniffa and Hudaib, 2002). One’s good and bad deeds to Allah and mankind shall
retain in the account of Allah on the judgement day.
“Then as to one who is given his record in his right hand. He will soon
have an easy reckoning.” (al-Insyiqaq, 84:7-8)
Hence, the Islamic moral imperative and values is developed within the premise of
individual’s action in fearing of Allah, honesty, trust, keep-promises, cooperation
and forgiveness.
“Undoubtedly, Allah bids justice and good doing and giving to
kindred and forbids indecency and wicked things and rebellion. He
admonishes you that you may be mindful.” (al-Nahl, 16:90)
In contemplating the Islamic accountability, the relationship between human and the
Creator (Allah) and other mankind are deemed essential in addressing the Islamic
principles and values in promoting Islamic Accounting in Malaysia.
REFERENCES
Al-Quran, Translated by Ibnu Kathir, CreateSpace Independent Publishing Platform,
2013, ISBN 149127980X, 9781491279809
Askary, S., & Clarke, F. (1997). Accounting in the Koranic Verses. Paper presented
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