Accounting theory is a difficult subject even for accounting professors. Practitioners normally avoid theory as they are too concerned with practices. For accounting students, accounting theory is a boring and dry subject. Many accounting degree programmes and professional accounting qualifications are not really teaching accounting theory. However, accounting theory is important as theory provides the foundation for practice. Sometime practices change the theory. Conventional accounting has been in search of accounting theory for more than 50 years and yet the theory of accounting (even if there is) is still debatable and developing.
In a simple term, accounting theory is an explanation and a justification of "what accounting is" and what "accounting should be". It provides a framework of thinking and principles to guide practice. Hence, Islamic accounting is an explanation and justification of what "Islamic accounting is" and what "Islamic accounting should be".
For what "Islamic accounting is", my suggestion is we need to examine the practice of accounting especially in the contemporary Islamic institutions such as Islamic banks and Zakat institutions. In theory, these institutions are guided by the Islamic worldview and the Shariah. From the study of these institutions we need to be able to derive a theory of Islamic accounting.
For what "Islamic accounting should be", my suggestion is we need to study the main source of guidance for the Muslims i.e. the Qur'an to derive some broad principles that can guide accounting practice. For example, the implications of verse 282 Surah Al-Baqarah on the accounting theory development should be studied and explained thoroughly. We also need to study the body of knowledge of Shari'ah, Usul Fiqh and Fiqh Muamalat to draw some guidances as well.
Finally, who need to initiate, study and spend their life time to undertake the above important tasks?
In a simple term, accounting theory is an explanation and a justification of "what accounting is" and what "accounting should be". It provides a framework of thinking and principles to guide practice. Hence, Islamic accounting is an explanation and justification of what "Islamic accounting is" and what "Islamic accounting should be".
For what "Islamic accounting is", my suggestion is we need to examine the practice of accounting especially in the contemporary Islamic institutions such as Islamic banks and Zakat institutions. In theory, these institutions are guided by the Islamic worldview and the Shariah. From the study of these institutions we need to be able to derive a theory of Islamic accounting.
For what "Islamic accounting should be", my suggestion is we need to study the main source of guidance for the Muslims i.e. the Qur'an to derive some broad principles that can guide accounting practice. For example, the implications of verse 282 Surah Al-Baqarah on the accounting theory development should be studied and explained thoroughly. We also need to study the body of knowledge of Shari'ah, Usul Fiqh and Fiqh Muamalat to draw some guidances as well.
Finally, who need to initiate, study and spend their life time to undertake the above important tasks?
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