Professional Documents
Culture Documents
PRESENTATION
~ISLAMIC ACCOUNTING~~
NURUL HAZIRAH MUHAMMAD
ASMALYANA BT ABD MUHSIN
IZZAH DALILAH ROHIMI
MASITA ABU BAKAR
INTRODUCTION
• OLD IDEA
• Accounting is an objective, technical and
value-free discipline.
• Accounting+religion adjective= seem
unprofessional
• NEW IDEA
• Embracing the idea of Islamic Banking and
finance.
What is Islamic
Accounting?
• Specific form of accounting dictated
by religious precepts of Islam
• Sources:
– Qur’an
– Sunnah
• Likely to be normative-deductive:
– Shari’ah
DISTINCTIONS BETWEEN ISLAMIC ACCOUNTING AND
CONVENTIONAL ACCOUNTING
Concessionary
Participatory mechanisms
Profit and loss sharing
Mudaraba (trustee financing)
Musharaka (equity participation)
Musaqat (orchard financing)
Muzar’ah (share of harvest)
Direct investment
Non-profit and loss sharing
Qard al-hasanah (benevolent loan)
Bai’mua’jjal (spot sales)
Bai’salam (Forward contracts)
Ijara wa iqtina’ (leasing)
Murabaha (cost plus markup)
Jo’alah (service charge)
Trade financing
Why we must apply Islamic
Accounting?
• Ensure any of society comply with the
syari’ah principles and do not harm others
while making money ethically
• Achieve an equitable allocation and
distribution of wealth among members of
society especially the stakeholders of the
concerned corporation
• Information relevant - calculating zakah
• Social reporting – to the ummah
Religion and Accounting
The adjective “Islamic” is worried to be
added to accounting because:
• May compromise the objectivity of the
discipline
• Religion is mostly seen as an unchanging code
• Religion is not subject to logical
considerations
Religion and Accounting
• Capitalist is not used before the word
accounting.
• Epistemology (the nature and sources
of knowledge)
• Science has replaced the religion as the
authority in defining what is knowledge.
• Knowledge is only what is perceptible
through our senses,
experiment,observation, or anything
appears logical to our mind.
• Revelation is not considered as
knowledge since religious truth cannot
be verified by our senses.
Religion and Accounting
• However, science and religion are dealing
with two different level of reality.
• Science deals – physical universe that
perceptible through our senses.
• Religion deals – higher level reality beyond
the sense of perception.
• The ultimate objective of both science and
religion is to bring about the well being of
human beings.
• Science-physical and material
• Religion – social, mental , emotional and the
spiritual.
CONCLUSION
Islamic accounting would in fact be more
logical to use as it would result in an ethical
based accounting system which measures not
only profits but social, environmental and
religious performance!
THANK YOU!!