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In this concluding chapter, the aims and objectives of the study together with the

motivation for the study are reiterated in the next section. A summary of the discussion

presented in chapters 2 to 5 on the need for an Islamic accounting follows in section

11.2. In section 11.3 the main theoretical findings of the study are summarised. This is

followed by section 11.4, which presents a summary of the main findings of the

empirical surveys. In section 11.5 the limitations of this research and suggestions for

further research are presented. The thesis is concluded in section 11.6 with the original

contributions to knowledge of this study.


This study has aimed to investigate the possible need for ‘Islamic accounting’ as an

alternative to the conventional (Anglo-American) accounting system currently in practice

in most parts of the world. In particular, it aimed to study whether the objectives,

characteristics and consequences of conventional accounting were appropriate to

Islamic organisations and Muslim users and if not, to propose the outlines of an Islamic

accounting theory. The second part of the study was aimed at obtaining evidence as to

the perception of Malaysian Muslim Accountants and Academics on the suitability of

conventional accounting for Muslim users and Islamic organisations, as well as the

objectives and characteristics of Islamic accounting. In addition it also aimed at

obtaining empirical evidence on the unIslamic behavioural consequences of

conventional accounting on Muslim users.

The motivation for the study is the seemingly inexorable dominating tendency of Anglo-

American conventional accounting, for example, in the example of the ex-communist

states such as China to adopt Anglo-American accounting methods in line with the
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liberalisation of its economy. This globalisation tendency of conventional accounting is

despite the known influence of cultural, religious, social, business and political factors

on the nature of accounting practice.

Further conventional accounting has been accused, in the social and critical accounting

literature as creating disastrous social and environmental realities as well as promoting

certain negative social values rather than being objective and neutral as held out be, by

the accounting profession. If this were true, the impact of conventional accounting

would be more disastrous for Islamic society, which has a different world-view and

values compared to Western capitalistic societies which nurtured conventional

accounting. Thus the researcher was motivated to enquire as to what factors made

conventional accounting inappropriate for Islamic society and what factors drove the

need for the development of an ‘Islamic accounting’ which would be more appropriate

for Islamic society. Having argued the need for an Islamic accounting, the study aimed

to map a theoretical outline of Islamic accounting in terms of its objectives and

characteristics and consequences. Finally the study aimed to test this theoretical outline

with the perceptions of Malaysian Muslim Accountants and academics as a prelude to

further research which can expand the survey to other Muslim countries.


As opposed to the image of conventional Anglo-American accounting as a neutral,

value-free and objective technical activity, it was argued that accounting affects and is

affected by society in a complex intertwining relationship (Chapter 2).

11.2.1 Development of values underlying conventional accounting.

Conventional accounting was shown to have certain underlying philosophical

assumptions, which were the outcome of the Western worldview, values and social and

economic values. These values, the result of the historical evolution of European
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civilisation, which went through several stages of development, were shown to be

different from that of Islamic civilisation (Chapter 2). It was shown that while the

Western worldview is a mainly materialist worldview with secularism, democracy,

consumerism, utilitarianism as its core values, the Islamic values present a dual-world

view of trusteeship of God’s resources and accountability here and in the hereafter.

This worldview affects Islamic economic objectives and norms which is aimed at

pleasing God through obedience to the Shari’ah in all aspects of life.

The basic difference was due to the Islamic teaching of Tawhid or Oneness (Unity) not

only of God but also of creation and the practical consequence of this teaching is the

unity of the state and mosque as opposed to the secularist thrust in the West.

A comparison of the Islamic world-view and values with that of Islam showed significant

differences. For example, the strong belief of accountability in the hereafter had

implications for the definition of welfare and success. Success in the West is mainly

measured in terms of material possessions whereas an Islamic world-view would

include material progress and good deeds undertaken. God’s pleasure takes the place

of (or at least conditions) the utilitarianism of modern economic theory. Further the

prohibition of interest, gambling, alcohol and aleatory contracts in Islam, has major

economic and accounting implications. Interest bearing securities are prohibited, hence

profit calculations, which preserves equity between stakeholders, become much more

important in Islamic accounting. Further calculation of Zakat (an Islamic religious tax)

becomes an important issue which has further implication on the valuation system used

in accounting.

The implications of these different world views on the economic behavioural codes and

on both conventional accounting and Islamic accounting was postulated in Figure 2-4 in

Chapter 2 in terms of differences in the objectives, users, recognition, measurement

and disclosure characteristics. Since the accounting-society interface (figure 2-1)

means that worldview affects accounting and vice-versa through user behaviour, it was

argued that the use of conventional accounting by Islamic organisations, especially

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established to achieve Islamic socio-economic objectives, may lead to inconsistent

behaviour of Muslim users of accounting information (Figure 2-5). This may in turn lead

to non-achievement of the objectives of Islamic organisations and in the long-term

perversion of the organisations themselves into capitalistic organisations. Thus, the

development of an alternative Islamic accounting system consistent with Islamic values

was shown to be necessary.

11.2.2 The Push factors: Why conventional accounting is inappropriate for Islamic
organisations and users.

This study next investigated in detail the factors, which necessitated the development of

an Islamic accounting system (Chapters 3,4 and 5). The researcher grouped these

factors into two categories; the push factors and the pull factors. The push factors are

those that made the existing conventional accounting system inappropriate for Islamic

organisations and users while the pull factors consists of those factors which provided

the impetus for Islamic accounting.

The push factors, which rendered conventional accounting inappropriate for Islamic

organisations and users, were shown to be its objectives, characteristics and

consequences (Chapter 3). Specifically, the underlying assumptions, the economic

environment and dysfunctional effects of decision-usefulness were examined together

with problems of the definition of social welfare which decision usefulness is supposed

to obtain. It was shown that the developed capital market assumptions underlying the

objective of conventional accounting (to provide cash-flow information to investors and

creditors) may not be true of developing countries in general and Muslim countries in

particular. Further, the definition of social welfare, which was supposed to result from

the use of accounting information, was shown to have some problems in the context of

an Islamic society. Specifically social welfare could not be measured only in material

terms in an Islamic society, as the equation of material allocative efficiency to social

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welfare, seem to indicate. This could in fact lead to efficiency at the expense of equity

and justice, which are cornerstones of Islamic society.

The researcher showed that the requirement to calculate Zakat and preserve equity

between stakeholders made some conventional accounting principles such as historical

cost and prudence (together with the historical cost profit model) inappropriate from an

Islamic point of view. It was suggested that a modified form of realisable income might

be more suitable for Islamic organisations.

In tandem with the concern of critical and social accountants, the damaging

consequences of conventional accounting to the natural environment, social fabric (e.g.

loss of employment, privatisation) and multinational companies’ exploitation and

inequitable wealth transfer from developing countries was also shown to be

unacceptable from an Islamic perspective. Finally, the behavioural consequences at the

micro level resulting from the use of conventional management accounting tools such

as budgeting and performance evaluation was shown to be unIslamic. The use of these

tools could lead to cheating, conflict between employees and managers, between

employees and to a perversion of the social objectives of Islamic organisations to

materialist ones.

11.2.3 Pull Factors 1: The theoretical imperative

The first category of ‘pull factors’ for Islamic accounting was then investigated (Chapter

4). It was shown that a paradigm shift in epistemology is taking place in the Muslim

world through the attempted Islamisation of Knowledge. This movement was seeking to

reintegrate knowledge with revelation – a position anathema to Western academics

resulting from their historical experience with Christianity. For the Muslim, however, the

movement was ‘back to original roots’ as for the Muslim world, the present bifurcation of

knowledge into secular and religious is an unacceptable deviation from an Islamic

perspective. This was claimed to be one of the causes of the Muslim malady of poverty
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and deprivation, in which they find themselves, leading a schizophrenic dichotomous

life inconsistent with their fundamental beliefs. Islamisation of knowledge seek to recast

modern disciplines (especially those of the social sciences) in the light and the vision of

Islamic values and worldview.

This study considered the various approaches to the Islamisation of Knowledge

suggested in the literature with a view to adopt the appropriate approach to Islamise

accounting, which this research project is an initial attempt. It was found that following

all the steps suggested was too daunting due to time and financial constraints for a PhD

project such as this. Thus it was thought best to incorporate only parts of the suggested

methods such as critically re-examining the Western values embedded in accounting

which are anti-Islamic and substituting these with Islamic principles deduced from the

Islamic world-view and Islamic economics.

Islamisation of knowledge was also compared to developments in epistemology and

sociological paradigms of Burrell and Morgan (1979). As the selection of a single

paradigm of Burrell and Morgan was not appropriate for this research, the researcher

located this research in a third dimension (the Islamic paradigm). This was due to

special nature of this research, which took into account both the warnings of Hopper

and Powell (1985), that there is a strong relationship between the positions on each

continuum, as well as adding a non-material spiritual dimension which does not

configure in contemporary Western epistemology.

11.2.4 Pull Factors 2: The practical imperative

This study also reviewed the development of Islamic organisations and features of the

Islamic Economic System, which constituted the theoretical basis of these institutions

(Chapter 5). In particular, the problem of the riba (interest) which is prohibited under

Islamic Law but which forms the corner stone of capitalist financial institutions and

markets, were discussed. It was shown, that although there were differences of opinion

on the definition of riba even in Muslim circles, which tried to exclude commercial
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interest from the prohibition, the majority of Muslim scholars and masses consider all

forms of interest, commercial or otherwise as prohibited. The various types of Islamic

Organisations were discussed and it was shown that modern corporate form of

organisation was allowed under Islam with the exception of debt capital and possible

misgivings of limited liability. However, all Islamic organisations would have to follow

the Shari’ah with the consequence that they could not operate in certain prohibited

industries. These included alcohol, pornography conventional finance and gambling.

Hence, all Islamic organisations are ethical investors although the criteria of what is

ethical may be different in Islam as compared to Western ethical investments. Further, it

was shown that the profit maximisation model is not suitable for Islamic organisations

as their objective tend to incorporate secular utility and ‘ritual utility’, the latter

consisting of non-profit oriented social objectives intended to please God.

Various types of Islamic business and non-profit organisations were reviewed briefly.

These included Zakat collection and distribution agencies, Awqafs (endowments),

Islamic insurance companies and Islamic businesses. The objectives and operations of

Islamic banks were reviewed in some detail. This review showed that the structure,

objectives and operations of these Islamic organisations were somewhat different from

their capitalistic counterparts. As such, their accounting requirements were somewhat

different. For example, the operations, the nature of the financial instruments used by

Islamic banks and the need to allocate profits between the banks and depositors,

required different capital adequacy ratio regulations and different accounting standards

and procedures. In addition, the ethical nature of these banks required different

disclosure standards especially for non-financial disclosures.



The researcher adopted a normative-deductive methodology to outline a theory of

Islamic accounting (Chapter 6). This was done after considering the ethical background
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of Islamic organisations and the objectives of Islamic economics under which Islamic

business organisations operate. The attainment of falah (success and welfare), which

included both economic and social attainments, was shown to be the objective of

Islamic economics. These attainments would have to be accounted to God in the

hereafter, in the Islamic perspective but it was recommended for Muslims to keep track

of their actions in this life.

Consistent with this world-view and economic paradigm, the researcher defined and

suggested that an “Islamic Accountability” framework would be more appropriate for

Islamic accounting rather than “decision-usefulness” advocated for conventional

accounting (Chapter 6). As such, the researcher proposed an Islamic accountability

model, showing a dual accountability role for Islamic organisations (or accountors) –

one to God (in the form of social accountability to society and stakeholders) and one to

the contracted accountee.

Besides the primary objective of “Islamic accountability”, the researcher also proposed

subsidiary objectives of Islamic accounting. These included the provision of information

on Shari’ah compliance, the proper assessment and distribution of Zakat, the equitable

and fair distribution of wealth generated by the organisation among its employees and

other stakeholders and the promotion of a co-operative environment and solidarity.

Further, the researcher also suggested that stakeholders other than shareholders might

be as important if not more important as users of Islamic accounting information, in line

with the Islamic concept of taklif’ or “responsibility according to capacity”. Since large

corporation used more community resources, they would have to be accountable for

them to the community.

The researcher also considered the characteristics of Islamic accounting and proposed

that it be holistic and integrative rather than restricted by the monetary measurement

concept to “internalities” only. It was proposed that Islamic accounting should inform

users on Shari’ah compliance and prohibited transactions, wealth distribution, internal

employee/manager relationships and social and environmental impact of the

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accounting entity. The researcher also suggested that traditional auditing should be

extended to Islamic auditing which would attest the compliance of the Islamic

organisation to Shari’ah rulings and social obligations.

Finally, the researcher noted the importance of income calculation in Islamic accounting

as there would be an absence of interest-based instruments and a preponderance of

Mudharaba and Musharaka (dormant and active partnerships respectively) contracts.

Due to this and the wealth transfer implications of Zakat, it was suggested that the

historical cost model should be replaced with a mixed valuation model using current

valuation for stocks and fixed assets but separating the operational and holding gains.


For the purpose of obtaining consensus of certain categories of Islamic accounting

users, the questionnaire method (both postal and delivered) was considered to be most

appropriate and was used to obtain evidence of perceptions of respondents on Islamic

accounting issues (Chapter 7). This was in line with the Islamic jurisprudence principle

of ‘ijma (consensus of scholars or the learned) which is used to expand Islamic Law.

The choice of Malaysian Muslim Accountants and Accounting Academics were targeted

as the population to be surveyed as the researcher viewed that these were the relevant

ulema or scholars whose perceptions were important. The choice of Malaysia as the

research site was due to several reasons such as familiarity in terms of language and

contacts, finance and time considerations. More important in selecting Malaysia as the

research site was that the country is in the process of long-term Islamisation in its

political, social and economic system. Malaysia has set up Islamic banks, insurance

and investment companies as well as setting up Zakat collection agencies and Islamic

universities. Further, an Islamic money market as part of an Islamic financial system

operating in parallel with the conventional system has been set up. In addition, there is

a developed stock exchange with many big companies, which can be described as
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Muslim if not Islamic. Further, there is a general Islamic resurgence in Academia as well

as among Muslim businessmen who try to implement Islam in their activities.

The Islamic accounting Questionnaire (IAQ) was used to elicit perception of Malaysian

Muslim Accountants and Accounting academics on the question of;

• The ethical framework of Islamic business organisations

• The ability of Islamic scriptural sources to provide for the development of a

regulatory framework for contemporary Islamic organisations.

• The appropriateness of conventional accounting information and principles for

Islamic organisations

• The main and subsidiary objectives of Islamic accounting

• The relative importance of stakeholders other than shareholders as users of Islamic


• The information which Islamic accounting should provide and its characteristics.

From the above research areas, ten hypotheses were formulated to be tested in the

questionnaire survey. Of the 317 questionnaires mailed and delivered to Malaysian

Muslim accountants, there were 105 respondents representing an overall response rate

of 34% and 5.7% of the total population of Malaysian Muslim Accountants. Of the 157

Muslim Accounting Academics surveyed, 101 academics respondents, which

represented a response rate of 64.3% and 22.9% of the total population of Muslim

Accounting Academics.

Multi-item scores for each research area was computed using means of several

questions in each area of interest. A descriptive analysis of the scores indicated

revealed strong support for:

• The Islamic ethical framework of Islamic business organisations

• The ability of Islamic scriptural sources for developing regulatory framework for
contemporary Islamic organisations.
• The accountability framework of Islamic accounting
• The importance of non-financial and the integrated nature of Islamic accounting
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There was somewhat less support for:

• The inappropriateness of conventional accounting and

• The importance of stakeholders other than shareholders

However, the respondents disagreed strongly that conventional accounting principles of

historical cost, prudence and money measurement were inappropriate for Islamic


A Kruskall-Wallis tests of differences of means indicated that there is a relationship

between the responses and certain characteristics of the respondents. This included

the sector in which the respondent worked (public, commerce or firm), whether the

respondent was a professional accountant or academic and the highest educational

qualifications of the respondent. The place of qualification and the level of social and

environmental accounting education showed relationship to a few of the areas

investigated. The level of Islamic qualifications, overseas technical assistance to firms,

and experience of respondents seems to have negligible effect on the answers. Since

this was an exploratory study, the relationships were not explored further.

Due to the exploratory nature of the subject, it was decided to use simple statistical

tests of central tendencies, to test the ten hypotheses formulated. Due to the non-

normality of some of the sample distributions, both non-parametric sign test of median

as well as the parametric t-tests of means were used.

From the testing of the hypothesis (Chapter 9), it was found that:

1) Malaysian Muslim accountants and accounting academics believed that Islamic

Business organisations concentrate more on the attainment of social welfare than

on profits (Hypothesis 1). In other words, they perceived that Islamic organisations

should work under the constraints of the Shari’ah, ensure the just treatment of all

stakeholders, avoid damage to the environment, pay sufficient wages to its

employees even at the cost of reducing shareholder’s profits and promote the

attainment of social welfare.

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2) The respondents further believed that Islamic business organisations do not

participate in activities, which are not in line with Islamic socio-economic principles

(Hypothesis 2). This meant that Islamic business organisations should not raise

debt finance and deal in futures and options or undertake short selling or contra


3) The belief in the ability of the socio-economic principles in the Qur’an and Sunnah

to be developed into to an economic/regulatory framework to meet the current

needs of Islamic organisations were particularly strong among Malaysian Muslim

accountants and accounting academics (Hypothesis 3). This was indicated by

population mean and medians of more than 4 (meaning strongly agree). This at

least implies that secularisation of the middle class accounting professionals and

academics have failed in Malaysia. This bodes well for the development of Islamic

economic ethos in Malaysia in future.

4) The respondents also perceived that conventional accounting do not direct Muslim

users towards Islamic behaviour (hypothesis 4) and that conventional accounting

needed major modification for Islamic organisations.

5) However, the respondents did not believe that financial statements provided under

conventional accounting impeded the fair allocation of wealth between stakeholders

or hinder the making of appropriate decisions to control the organisations to ensure

the attainment of their objectives (Hypothesis 5). Despite this, the respondents

perceived that the information provided by conventional accounting do not allow

them to properly disclose their Islamic accountabilities.

6) The respondents strongly perceived the conventional accounting concepts of

historical cost, prudence and monetary to be suitable for Islamic organisations

(hypothesis 6). This finding could be due to the perception that general belief that

accounting is concerned with money and prudence principle serves as a protection

to absent shareholders and creditors from overvaluing the assets.

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7) Malaysian Muslim accountants and accounting academics also believed that

decision-usefulness is not the main objective of Islamic accounting (Hypothesis 7).

In fact they strongly perceived ‘Islamic accountability’ to be the main objective of

Islamic accounting as their median and mean score for this question was more than


8) The respondents also held the belief that Islamic/Social objectives of Islamic

accounting are more important than economic objectives of Islamic accounting

(Hypothesis 8). Although they did not reject the objective of shareholder wealth

maximisation and efficient capital allocation, Zakat assessment and distribution,

Shari’ah compliance and the creation of a co-operative environment within and

without the organisations were held to be more important.

9) Further, Malaysian Muslim accountants and accounting academics believed that in

contrast to conventional accounting, shareholders are not more important users of

Islamic accounting than other stakeholders especially, benevolent loan creditors,

employees, government and the community (Hypothesis 9). This lends increasing

support to an accountability framework for Islamic accounting.

10) Finally, the respondents believed that Islamic accounting emphasises Islamic/social

information rather than purely financial information on profits, cash- flows and

financial position (Hypothesis 10). Specifically, they perceived that Islamic

accounting should provide wider holistic information on environmental impact,

employee-manager relationship and working conditions, Islamically prohibited

activities and social impact on the community. Further, the respondents perceived

that current values should be used in the balance sheet and called for Shari’ah audit

and the inclusion of externalities.

As the main objective of this questionnaire was seeking consensus, a proportion test

was conducted using the conservative cut-off mark of 40% of population disagreement.

This had to be rejected in all cases except that of conventional accounting principles.

This means that at least 60% of the Malaysian Muslim Accounting Academics and
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Accountants agree or strongly agree to those areas shown above, except for

conventional accounting principles of historical cost, prudence and monetary

measurement. This shows strong support for the development of an Islamic accounting

system that is more in line with Islamic values and more appropriate for Islamic

organisations and users.

The unIslamic behavioural consequences of conventional accounting was tested using

the ‘finance’ and ‘non finance’ questionnaires (Chapter 10). It was found that the type of

organisation exerted a strong moderating influence affecting investment, financing and

operating behaviour. It was found that Islamic business organisations better adhered to

Islamic guidelines in financing activities to a higher extent and to a slightly lesser extent

in investment and operating activities. Muslim organisation adhered only moderately

adhered to Islamic guidelines while Muslims in non-Muslim organisations do not

generally adhere to Islamic guidelines in all three activities. Hence, Islamic culture and

commitment diminishes the power of accounting to misdirect Muslims to behave in an

unIslamic manner but does not completely purge it except in the choice of financing.

However, accounting does affect influence Muslims in all types of organisations to seek

quick profits which could be considered against the broad objectives of the Shari’ah.

Islamic organisations also do not seem to avoid luxury projects and do not seek

environmentally friendly investee companies. Further, the respondents found

conventional accounting information to be less than useful in making Islamic investment

decisions. Thus, there is some evidence of unIslamic behaviour in the search for profits

encouraged by conventional accounting and inappropriateness of conventional

accounting for investment purposes.

There also seems to be lesser Islamic commitment among foreign directors whereas a

higher Islamic commitment seems to exist among employees and managers. Islamic

commitment seems to be low in Muslim organisations among both employees and

managers, except for Non-executive directors. This may indicate evidence of unIslamic

behaviour among Muslims in such organisations. In general, however, the level of

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Islamic commitment is highly correlated with the type of company; Islamic company

highest, Muslim companies moderate (but with high variability) and non-Muslim

company lowest. This finding is consistent with theoretical expectations.

Although overall conventional accounting do not seem to spur Islamic organisations to

any unIslamic behaviour, in general, Muslim organisations and Muslims in non-Muslim

organisations had to follow the dictates of conventional accounting to maximise profits

even when this is contrary to Islamic guidelines.

Finally, the behavioural effects of conventional accounting tools on Muslims were

investigated using the ‘non-finance questionnaire’ distributed to non-finance personnel

working in various types of organisations. The investigation focused on three areas;

budget pressures, performance evaluation and profit focus.

It was found that about one-third of the respondents agreed to padding and cutting

corners (such as training, safety and welfare) to achieve budgets, while another one

third were neutral and the rest disagreed. Slightly more than one-quarter of the

respondents agreed that budgets caused friction among employees and between

employees and managers, while about 40% of the respondents were neutral with about

one-third disagreeing. Hence, while in general, it can be inferred that budgeting does

lead to unIslamic behaviour, the extent of such negative behaviour does not seem to be


The responses in the performance evaluation area indicated that performance is based

on budget achievement and accounting numbers. However, strangely, extraneous

circumstances and to a lesser extent social and community work are seem to be taken

into account in assessing performance. Overall, although there seem to be some

reliance on accounting numbers (which may be considered unIslamic) but this seem to

be balanced by other non-accounting performance indicators. Hence, there is no

evidence that the performance evaluation tools of conventional accounting leads to

unIslamic behaviour.
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There is some evidence that conventional accounting causes a profit-focused

behaviour among Muslims. It seems that staff welfare, training, benefits, working

conditions and even safety are sacrificed to increase profits. However, the answers are

not consistent as the majority of respondents reported that working conditions are taken

seriously. Perhaps, this is the case as long as it does not affect profits too much!

Further, the inductance affect of accounting does not seem to lead to the sacrifice of

Islamic ideals. Overall, the results indicate that conventional accounting might lead to a

strong profit focus (and thus unIslamic behaviour), the inconsistency in responses

suggest that the evidence may be less reliable.

In contrast to the hypotheses tested (Chapter 9) from the Islamic accounting

Questionnaire, however, the results from both the finance and non-finance

questionnaire were not generalisable to the population of finance managers and non-

finance personnel in Malaysian companies as the sample selected was not random.

Hence, inferential statistical tests could not be applied, as the results would not have

been valid. However, the sample statistics has given some preliminary insights on the

behaviour effects of conventional accounting on Muslim users. Although the results

seem to be mixed, there is a case for further investigation of unIslamic behavioural

effects of conventional accounting on a larger scale.


As with all research, this research had some limitations. In particular several important

aspects of Islamic accounting could not be investigated due to the length and time

limitations. These include the structure of the Islamic accounting report, and the in-

depth discussion of recognition and measurement system for Islamic accounting. The

scope of the empirical research was also restricted due to cost and time considerations

to Malaysia.
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Hence, the perception survey needs to be extended to Muslims in other countries to

broaden the consensus. This could also reveal differences in perceptions due to

cultural differences among Muslims. In addition it could be extend to Muslim religious

scholars or ulema as their opinion lends credibility to any consensus of academics and

professionals in terms of acceptability under Islamic Law.

The range of accounting principles tested could also be extended in future research to

include conventions other than the historical cost, prudence and monetary

measurement principles tested in this research. This would be a basis to confirm or

refute the compatibility of conventional accounting principles to Islamic accounting.

Future research could also look into the design of data-capture systems and

measurement techniques to measure externalities and non-financial data and the

structure of Islamic accounting Reports.

There is also need to refine and extend the survey of the behavioural accounting

questionnaires in order to make inferences to the population of Muslim users. However,

future case studies of Islamic, Muslim and Muslims in Non-Muslim organisation

covering a period of time could lead to much better insights than surveys regarding the

unIslamic consequences of accounting. In particular, the interaction between Islamic

culture, commitment and behaviour and how it changes over time will provide better

evidences of the negative consequences of conventional accounting on Muslim users, if



This research, to the researcher’s knowledge, is the first to enquire into the need for

Islamic accounting. Previous research such as those by Baydoun & Willet (1998),

Hamid et al., (1993) and Abdulgader (1990) had addressed different aspects of Islamic

accounting such as Islamic corporate report, profit allocation problems in Islamic banks

and Harmonisation of International Accounting standards. This research is the first to

contribute comprehensively into the need for Islamic accounting although it does not
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offer solutions in many areas.

The previous comprehensive study by Gambling & Karim (1991) was quite in depth but

it did not really answer why Islamic accounting was necessary by questioning the

contemporary accounting system and whether an alternative system was necessary at

all. This study is the first to suggest that Islamic accounting is needed because of the

interaction of values with economic behaviour and accounting and that the different

value system of Islam required a different accounting system. It showed that the

Western philosophical assumptions underlying conventional accounting is more

consistent with a capitalist economic system rather than an Islamic economic system

and thus not appropriate for Islamic organisations.

This study also the first to examine in detail the objectives, characteristics, and macro

and behavioural consequences of conventional accounting which was shown to be

inconsistent with Islamic values and therefore not conducive to Islamic organisations.

This study is also a first attempt in the Islamisation of accounting and the exposition of

the Islamisation of knowledge and its link to the sociological paradigms of Burrell &

Morgan (1979) could also be seen as a contribution to Islamisation of knowledge in


This research is also a first in its exposition of the implication of the objectives and

operations of various Islamic organisations to the need for an alternative Islamic

accounting system, although the need for modification of accounting for Islamic banks

had been recognised in previous literature. This study extends it briefly to various types

of Islamic organisations.

The proposals outlining a theory of Islamic accounting based on an Islamic

accountability model is another original contribution of this research, although the

practicability of this need to be addressed in later research. The proposals outline

shows that Islamic accounting has different objectives and characteristics, different from

those of conventional accounting in order bring about the appropriate accountable

behaviour of users and Islamic organisations.

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This research is also the first to conduct empirical investigations of perceptions of

accounting professional and academics on the objectives, characteristics of Islamic

accounting and the suitability of conventional accounting to Islamic organisations. The

strong support for Islamic accounting among Western-educated Muslim intellectuals

was also remarkable as it also showed the failure of secularisation of these groups.

Although the results of the behavioural accounting questionnaires were mixed and may

not be very reliable, it did add some insight into the possibility of negative behavioural

consequences of conventional accounting on Muslim users. To the researcher’s

knowledge, this type of investigation is also the first to be undertaken by any