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Conclusion

As conclusion, Islamic religious organizations need to think about how they operate and put Islamic values in place to avoid such weaknesses.

Accounting Policy Choice Within The Shari’ Ah Islami’Iah framework

Introduction

This paper discuss the relation and implications of conventional accounting principles to Islamic financial institutions (Baydoun and Willett, 1994; Gambling and Karim, 1991) (Ros Haniffa and Mohammad Hudaib), the problem of harmonisation of international accounting standards in Islamic countries (Hamid, Craig and Clarke, 1993; Karim, 2001), a proposal for the formatting of Islamic corporate reports (Baydoun and Willet, 2000), a philosophical review of the ethical construction of accounting knowledge and the use of Shari’ ah Islami’ iah for guidance in the development of accounting theory (Haniffa and Hudaib, 2002) and accounting policy choices in a riba-free environment (Mirza and Baydoun, 2000).

Main Content

In Islamic perspective, the economic rationality, concentrating on maximising shareholders’ wealth and weighing the costs and benefits of producing accounting information are often used to make decision. Besides that, the firms also likely to minimise the costs associated with contracts. This costs affects the firms’ accounting and reporting policies.

Furthermore, muslim managers must strive to provide excellent lawful products or service to society to demonstrate responsibility and accountability to Allah, provide relevant and reliable information regarding all lawful and unlawful activities to demonstrate transparency in business activities.

On the other hand, the valuation method promoted to increase zakat payment above the threshold stipulated by the Hadith. The computation is based on assets rather than income. Thus, historical cost method has been used if stewardship is concerned. Why the historical cost method preferred? This is because it reflects asset values at the time of acquisition and the contracts are written in historical cost numbers. Besides that, it’s also less costly and simple to understand and use. In contrary, the weaknesses occur in the historical cost system such as allocation problem and conservatism. In summary, Islamic accounting system use both historical cost and market selling prices.

From Islamic view, disclosure of accounting means disclosing information that would aid economic as well as religious decision-making and the information have to be relevant, objective and material. Full disclosure means disclosing any information deemed relevant and should be rightfully given to members of the umnah to facilitate their economic and religious decision-making. While, the ‘materiality’ relates to any information will indicate justice in valuation and fulfilment of the rights of Allah, society and individuals concerned.

Conclusion

As conclusion, Islamic accounting system use historical cost for asset valuation to satisfies the stewardship objective. And use market s本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。