aminahz

This are features in Islamic Accounting :

• No different in terms of recording (double entry system)

• Clear distinction of Accounting Objectives i.e. religious obligation vs. commercial obligation (different significance of financial statements)

• Different users information need (legitimate and equitable transactions and wealth vs. maximization of wealth and economic consequences)

• Compliance with the principles and rules of Shari’ah

• Different Islamic contractual relationships (mudarabah instrument; murabahah etc.)

• Distinct accountability relationships (to Allah SWT and Ummah)

• Determination of zakat

Source : “Reporting For Islamic Financial Transaction” by DR. Noraini

Islamic accounting is a also tool, which enables Muslims to evaluate their own accountabilities to God (in respect of inter-human/environmental transactions)

Al Qur’an text as basic principle of Islamic Accounting:

Al-Baqarah 282: “O you who believe! When you 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 God has taught him, so let him write. Let him who incurs the liability (debtor) dictate, but let him fear his Lord God, and not diminish aught of what he owes. If the party liable (debtor) is mentally deficient, or weak, or unable himself to dictate, let his guardian dictate faithfully, and get two witnesses, out of your own men, and if they are not two men, then a man and two women, so that if one of them errs, the other can remind him….” The witnesses should not refuse when they are called on (for evidence). Disdain not to reduce to writing (your contract) for a future period, whether it be small or big: it is more just in the sight of God, more suitable as evidence, and more convenient to prevent doubts among yourselves. But if you carry out the transactions  on the spot there is no blame if you reduce it not to writing. But take witness whenever you make a commercial contract, and let neither the scribe nor witness suffer harm. If you do (such harm), it would be wickedness in you. So fear God; for it is God that teaches you. And God is well acquainted with all things”