This paper discussed about Islamic accounting means the construct of answerability in Islam [ taklif ] . Allah control Man to give back the entrusted things to whom they are due. Therefore, Man is accountable for the spiritual facets and besides for societal, concern and contractual traffics.
The jobs in traditional fiscal accounting are unequal and uncomplete records. If the good accounting information is complete, it can provides intended users with all the necessary information to carry through information demands and demands. However, it ‘s besides create jobs in accounting system. They must including all relevant information in order to supply accurate information. From my point of position, traditional accounting emphasizes on users demand of information while Islamic accounting emphasizes on answerability of the comptrollers in unwraping the information.
The entity construct which states that the house and its proprietors are separate entities and one house is separate from another house because the proprietors are non apt for the company ‘s debt at the clip of bankruptcy but have the rights to residual net incomes which is improper and similar to chancing. This construct was disagrees by Islamic Shari’ah. If the proprietors become belly-up, so the liabilities may be distributed to their replacements or legal heirs. From my position, entity construct is needed to enter the concern ‘s minutess individually and to separate them from the proprietors ‘ personal minutess.
As decision, from Islamic position stated that answerability is a basic constitutional construct in the Muslim society and belief. They have their ain accounting system pattern in entering and cimmunicate the minutess.
6 ) The Development Of the Conceptual Framework For Accounting For Islamic
The outgrowth of Islamic Bankss and fiscal establishment and the specializer in Islamic Shariah and accounting have led them to seek the most appropriate agencies to supply dependable and relevant information to users of fiscal statement of organisations. Harmonizing to Stauton 1984, different societies have different worldviews and values, hence, a symmetrical conceptual model may be hard to accomplish. From my point of position, some societies are emphasizes on the rules of Islam and less emphasizes on the aims of fiscal coverage, the proposition of accounting and definitions of accounting rules from Shari’ah rules. Therefore, the different worldviews of Islamic position affects the information demands of an Islamic community that are different from those of a capitalist community.
From Islamic position, there are at least three categorizations of nomenclature hierarchy mentioning Kitabul Taarief:
1. Asl ( foundation, eg. the conformity of Shari’ah Islamiah )
2. Mabda ( rule, eg. halal mu’amalah, truth and equity in the
stewardship coverage, zakat focused coverage
3. Kaidah ( regulation )
In add-on, some accounting rules possibly misinterpreted or interchangeable in the classification of conceptual model of accounting, but, these three categorizations can non be interchangeable because each categorization has its fixed place.
Baydoun and Willet ( 2000 ) ( Zuhaili, Muhammad. 2003 ) stated that the focal point is on God and the society but non the single demands, a societal answerability position but non personal answerability from the Islam position. Adnan & A ; Gaffikin ( 1997 ) ( Zuhaili, Muhammad. 2003 ) strongly suggest that the primary aim of accounting information is to giving the satisfaction of the answerability to God which is paying Zakat and to seek Allah ‘s pleasance and non concentrate for stuff merely. From my point of position, it is as a whole, non on single. Therefore, it is non dependable to single stockholders and creditors to do determination utility. It is for primary users of stockholders and investors.
Other than that, SFA No.2 adopts unit measurement construct. When puting fiscal rights and duty, the alterations in buying power of money should be ignored. This construct is really of import in Islam because it sacrifies the value of honestness and equity. Ahmed ( 1991 ) ( Zuhaili, Muhammad. 2003 ) states that money as a unit of step is unbelievable from Islamic position in an inflationary environment. From my point of position, money as a unit of step is sensible because it is the most relevant currency in the base money unit. The accommodations on the basic fiscal statements non merely depend on the alterations in its general buying power.
As decision, we should understand and stress on the demands of conceptual model. Therefore, Islamic accounting organic structure ( AAOIFI ) should hold its original and unvarying conceptual model, farther and deep researches are needed in order to redefine and reproduce the conceptual model that derived from Shari’ah Islamiah.
7 ) Towards Good Accountability: The Role of Accounting in Islamic Religious
This paper discuss the issues of accounting and answerability in spiritual organisations, specially in Islamic spiritual constitutions, on the conventional significance and construct of answerability, rules of answerability within the Islamic model, differences between the Islamic and conventional position of answerability.
The enlargement beyond the Arabian Peninsula promote the development of a mechanism to guaranting answerability for all concern minutess and for conformity with Islamic jurisprudence. From Islamic Principles, every act of trusters must follow ethical criterions which define what is true, just and merely, the nature of corporate duties, the precedences to society and accounting criterions.
In Islamic spiritual organisations, there are less developed in accounting patterns. Furthermore, accounting patterns are non performed in conformity with the demands of their faith which are to be just, and honest towards each other.
As decision, Islamic spiritual organisations need to believe about how they operate and put Islamic values in topographic point to avoid such failings.
8 ) Accounting Policy Choice Within The Shari ‘ Ah Islami’Iah model
This paper discuss the relation and deductions of conventional accounting rules to Islamic fiscal establishments ( Baydoun and Willett, 1994 ; Gambling and Karim, 1991 ) ( Ros Haniffa and Mohammad Hudaib ) , the job of harmonization of international accounting criterions in Muslim states ( Hamid, Craig and Clarke, 1993 ; Karim, 2001 ) , a proposal for the data format of Islamic corporate studies ( Baydoun and Willet, 2000 ) , a philosophical reappraisal of the ethical building of accounting cognition and the usage of Shari ‘ ah Islami ‘ iah for counsel in the development of accounting theory ( Haniffa and Hudaib, 2002 ) and accounting policy picks in a riba-free environment ( Mirza and Baydoun, 2000 ) .
In Islamic position, the economic reason, concentrating on maximizing stockholders ‘ wealth and weighing the costs and benefits of bring forthing accounting information are frequently used to do determination. Besides that, the houses besides probably to understate the costs associated with contracts. This costs affects the houses ‘ accounting and coverage policies.
Furthermore, Muslim directors must endeavor to supply first-class lawful merchandises or service to society to show duty and answerability to Allah, provide relevant and dependable information sing all lawful and improper activities to show transparence in concern activities.
On the other manus, the rating method promoted to increase zakat payment above the threshold stipulated by the Hadith. The calculation is based on assets instead than income. Therefore, historical cost method have been used if stewardship is concerned. Why the historical cost method preferred? This is because it reflects plus values at the clip of acquisition and the contracts are written in historical cost Numberss. Besides that, it besides less dearly-won and simple to understand and utilize. In contrary, the failings occur in the historical cost system such as allotment job and conservativism. In drumhead, Islamic accounting system use both historical cost and market merchandising monetary values.
From Islamic position, revelation of accounting agencies unwraping information that would help economic every bit good as spiritual decision-making and the information have to be relevant, nonsubjective and stuff. Full revelation means unwraping any information deemed relevant and should be truly given to members of the umnah to ease their economic and spiritual decision-making. While the ‘materiality ‘ relates to any information will bespeak justness in rating and fulfillment of the rights of Allah, society and persons concerned.
As decision, Islamic accounting system utilize historical cost for plus rating to fulfill the stewardship aim. And use market selling monetary values to cipher and paying zakat. Muslim directors have to follow the policies comply with demands of Shari ‘ ah Islami ‘ iah.