International accounting and Islamic accounting

International accounting and Islamic accounting

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Institution

Introduction
Muslims cover 25% of the world population, which accounts for above one billion people. The countries with majority Muslims include Saudi Arabia, Kuwait, and Nigeria among others. According to Gambling and Karim (1991), international accounting (conventional) is well suited to an orthodox society of any kind. Therefore, it is not surprising as people turn to an integrated world views of any kind be it Islamic or otherwise.
Research question
What are the methods adopted by the Islamic and international accounting in attempt to bridge the gap between the poor and the rich? The research question will aim at establishing the different methods of accounting, the disparity of resources in Islamic communities and international levels. This will also evaluate the measures taken by Islam and internationally in accounting and its nature.
Research objectives
The research objectives will help in highlighting the priorities of the research done to acquire the expected outcome. The objectives will include identifying the different methods used in accounting both at international and Islamic accounting. To evaluate the compliance of accounting practice to the laws set in both international and Islamic respectively. The research will also investigate the need and view of accounting practices in respective categories, international and Islamic.
Research methodology
The methodology adopted for the study will determine the accuracy and reliability of the data. This study will sample few Islamic countries including Saudi Arabia, Kuwait, and Nigeria. The data collected on the nature of accounting, laws adopted in accounting and the views from the community based in the respective countries taken and analysed. This data will compare with the international accounting levels with the data sampled in few international countries mostly with minority as Islam community. This data will compare to give the methods used in accounting, evaluates compliance of laws in accounting, and the necessity of accounting in the two respective levels, Islamic and international level.
International accounting
There has been various criticisms of international accounting with many scholars questioning the why externalities are not included in the final financial report. This type of accounting has appeared to be inadequate because assets cannot measure accurately. Moreover, employees’ reporting interests and social interests of social groups seem overlooked. The accounting supports the exploitation of capital over labour and society as well as promoting concentration of wealth and power to the rich, which widens the poverty gap.
What Islamic accounting Contain?
What are advantages and disadvantages of International accounting?
Islamic accounting
On the other hand, Islamic means peace. The Quran has a support for Islamic accounting by stating, “Oh you who believe! When you deal with each other, in transaction involving future obligations in a fixed period reduce them in writing. Let a scribe write down faithfully as between parties” This shows the integration of spiritual-worship and socio-economic policy in Islamic world. Therefore, Islamic accounting is a discipline with social, economic and political field ruled by Allah (Simpson & Willing, 1996).
Therefore, Islamic accounting does not only involve income determination but also promotes efficiency, complies with Sharia law, is committed to justice and reports good things. 5. To report good things (Haniffa & Hudaib, 2010). The table below shows some differences between Islamic and International accounting according to Haniffa and Hudaib (2010).
What Islamic accounting Contain?
Add what are advantages and disadvantages of Islamic accounting?
Comparison between international and Islamic accounting
International accounting Islamic accounting
It is based on modern law, thus permissive rather than being ethical; It is based on Quran law (thus it is ethical in nature)
Personal data cannot be revealed for privacy reasons (focuses on individuals) All data can be revealed to remove all doubts about issues (focuses on community)
Conclusion
The study above will indicate the methods used in accounting, the extent of compliance to the laws in respective accounting and the need of accounting in both international and Islamic accounting. The research will provide recommendations on the methods adopted for accounting to ensure the accounting in the respective categories reach the expected standards.(Add recommendations)
References
Haniffa, R. &. Hudaib, M. (2010). the Two Ws of Islamic Accounting Research. Journal of Islamic Accounting and Business Research, 1 (1), 5-9.
Gambling, T. & Karim, R.A.A. (1991). Business and Accounting Ethics in Islam. Mansell, London.
Simpson, A. & Willing, P. (1996). Accounting and Auditing Issues in Islamic Banking, in European Perceptions of Islamic Banking, Institute of Islamic Banking and Insurance, London

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