Reporting 1

copy INTERNATIONAL CENTRE FOR EDUCATION IN ISLAMIC FINANCE 20111432 AH

IE 1002 Reporting of Islamic Financial Transactions

CIFP

Islamic Perspective of Accounting

Unit

1

Learning

Outcomes

By the end of this unit you should be able to

Define and explain the concept of Islamic Accounting

Argue that a separate accounting philosophy is required for

Islamic Banking due to differences in worldviews

Differentiate between the Accounting for Islamic Institutions and

Islamic Accounting

Define and Differentiate the differences between conventional and

Islamic Accounting

Topics in This Unit

1 Introduction

2 Meaning of Islamic Accounting

3 Religion and Accounting ndash An Explosive Mix

4 A Prima-facie case for Islamic Accounting

I s l a m i c P e r s p e c t i v e o f A c c o u n t i n g

U n i t 1 | 2



CIFP

Key Terms

Capitalism is an economic system in which the means of production are privately owned and

operated for a private profit decisions regarding supply demand price

distribution and investments are made by private actors in the market

Worldview fundamental cognitive orientation of an individual or society encompassing natural

philosophy fundamental existential and normative postulates or themes values

emotions and ethics

Sharia Islamic Law

AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions

Value free Not altered by value judgements

Hence O my people [always] give full measure and weight with equity and do not deprive people of

what is rightfully theirs and do not act wickedly on earth by spreading corruption That which rests

with God is best for you if you but believe [in Him] However I am not your keeper (Hud 1185-

86)


U n i t 1 | 3



CIFP

Need for Islamic

Accounting

All accounting activities will

have an impact on the welfare

of society in one way or

another ie having socio-

economic consequences The

emergence of Islamic banks as

a significant force in several

countries in the late-1970s has

prompted researchers to

consider the accounting

implications ldquoIslamic

accountingrdquo was almost

unheard of until

Abdel-Magid (1981) in his

seminal paper highlighted the

need for accounting practices

based on sharirsquoa principles to

cater for Islamic banks that

began to emerge at that

time The growth of Islamic

banking in the early 1990s

resulted in more scholarly

research into Islamic

accounting but they are either

not written in English and the

English-language literature

tends to be published in non-

mainstream accounting

journals (Napier and Haniffa

2010)or the internet


U n i t 1 | 4



CIFP

11 INTRODUCTION

To professional accountants and those who have received a conventional

accounting education and who have been brought-up on the idea of

accounting as an lsquoobjectiversquo technical and value-free discipline the idea

of attaching a religious adjective to accounting may seem to be

embarrassing and unprofessional

On the other hand the development of Islamic banking and finance now

embraced even by ardent capitalist institutions such as Citibank HSBC

and ANZ banks may interest accountants and other job seekers to the

possibility of new opportunities in this new discipline Perhaps the

Enron affair has rekindled an interest in having a more honest profession

who truly care about the public interest in addition to their pockets

Whatever the interest or curiosity we hope readers will find this chapter

(and hopefully the entire book) interesting informative and profitable

and yes we hope it may even lead to a bit of soul searching

In this chapter what is meant by the term ldquoIslamic accountingrdquo is

explained together with a discussion of the main differences between

Islamic and conventional accounting Justifications for the addition of

the world lsquoIslamicrsquo to the word accounting is provided along with a

prima facie case for Islamic accounting Finally the distinction between

accounting for Islamic banks and Islamic accounting which is presently

thought of by many people as synonymous is made


U n i t 1 | 5



CIFP

accounting for Islamic banks is a subset of Islamic accounting The latter covers a wider scope including accounting for takafulsukuk waqf zakat and Islamic businesses

12 MEANING OF ISLAMIC ACCOUNTING

Islamic accounting can be defined as the ldquoaccounting processrdquo which

provides appropriate information (not necessarily limited to financial

data) to stakeholders of an entity which will enable them to ensure that

the entity is continuously operating within the bounds of the Islamic

Sharirsquoa and delivering on its socioeconomic objectives Islamic

accounting is also a tool which enables Muslims to evaluate their own

accountabilities to God (in respect of inter-humanenvironmental

transactions)

Figure 11 Islamic Accounting and Accountability


U n i t 1 | 6



CIFP

Islamic Accounting

The system of accounting

which enableMuslims to

discharge their

accountabilities to Allah by

providing relevant

information on the

compliance of the company

to shariah principles

The diagram illustrates the purpose of Islamic accounting Muslims

believe in the hereafter All business activities should be in line with the

sharirsquoa or Islamic law including business In life people transact through

institutions such as business These activities are classified recorded and

summarized using a philosophic filter

(sharirsquoa and Islamic accounting

standards) to produce accounting

statements which people act on If the

information produced is useful and

appropriate to make economic or social

decisions through a moral framework

then the users will act in ways to correct

their lsquosinsrsquo and increase good behaviour

leading to Godrsquos pleasure in the hereafter If the accounting information

system misinforms or does not provide appropriate information the

business might be undertaking sinful activities the responsibility for

which will be borne by the investor as he is a participant This may lead

him to Hell

The meaning of Islamic accounting would be clearer if we compare this

with the definition of ldquoconventionalrdquo accounting (Conventional)

accounting as we know is defined to be the identification recording

classification interpreting and communication economic events to

permit users to make informed decisions (AAA 1966) From this it can

be seen that both Islamic and conventional accounting is in the business

of providing information The differences lie in the following

The objectives of providing the information


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CIFP

What type of information is identified and how is it

measured and valued recorded and communicated and

To whom is it communicated (the users)

Conventional accounting aims to permit informed decisions by users

whose ultimate purpose is to efficiently allocate scarce resources

available to their most efficient (and profitable) uses by providing

information efficiency in the market (FASB 1978) Apparently this is

achieved by the user making the appropriate buy sell or hold decisions

on their investments Islamic Accounting on the other hand hopes to

enable users to ensure that Islamic organisations (whether business

government or NFP) abide by the principles of the Sharirsquoa or Islamic Law

in its dealings and enables the assessment of whether the objectives of

the organisation are being met At the very basic level it can be said that

Islamic organisations (whether business or otherwise) differ from their

conventional counterparts by having to adhere to certain Sharirsquoa

principles and rules and also try to achieve certain socio-economic

objectives encouraged by Islam

Following from the above the type of information which Islamic

accounting identifies and measures is different Conventional accounting

concentrates on identifying economic events and transactions while

Islamic accounting must identify socio-economic and religious events

and transactions Older accountants may still remember when they first

learnt accounting They had to prepare final accounts (ie balance sheet

and profit and loss account) However Americanization of the

curriculum has popularised the term financial statements Hence the

concentration of accounting has moved from stewardship based


U n i t 1 | 8



CIFP

manorial accounts to accounting for money (accentuated by the

monetary measurement concept)

This is not to say that Islamic accounting is not concerned with money

(especially when accounting for businesses) On the contrary due to

prohibition of interest-based income or expense profit determination is

more important in Islamic accounting than conventional accounting

However Islamic accounting must be holistic in its reporting Hence

both financial and non-financial measures regarding the economic

social environmental and religious events and transactions are measured

and reported

Conventional accounting mainly uses historic cost (or lower) to measure

and values assets and liabilities (although the new IFRS seeks to

introduce fair value measurements) The profession is well aware of the

limitations of the stable unit of measure assumption of the monetary

unit and to its credit has tried in the past in its inflation accounting

initiatives However despite recommendation from its own research

efforts (True blood committee) the idea of using current values was

given up due to its complexity and presumed lack of verifiability From

an Islamic point of view at least for the purpose of computation of

Zakat current valuation is obligatory (see for example Clarke et al 1996)

prompting calls for a current value Balance Sheet (Baydoun and Willet

2000)

A further difference is Islamic accounting may require a different

statement altogether to deemphasize the focus on profits by the income

statement provided by conventional accounting Baydoun and Willlet

(2000) have suggested a Value Added Statement to replace the Income

Statement in Islamic Corporate Reports They argue that this shows and


U n i t 1 | 9



CIFP

encourages a cooperative environment in business as opposed to a

destructive competitive environment

The third category of differences is in the users of the information

Although the profession has recognised various stakeholders as users of

accounting information (see for example the Corporate Report 1975)

the users which it focuses on are shareholders and creditors (ie

Financiers ndash those who provide the funds) This is obvious from the fact

the FASBrsquos SFAC 1 dismisses a whole range of stakeholders by the term

ldquoand othersrdquo From recent developments in finance and financial

markets accounting seems to be serving an elite group of financiers ndash

market players and banks and other financial institutions It has been

accused of helping a group of rich people get richer (Gray et al 1996)- a

grave charge since the profession always justifies its monopoly on audit

services by virtue of the public interest

Islamic accounting serves the whole gamut of stakeholders Society as a

whole can make corporations accountable for their actions and ensure

they comply with Sharirsquoa principles and do not harm others while

making money ethically and achieve an equitable allocation and

distribution of wealth among members of society especially the

stakeholders of the concerned corporation

13 RELIGION AND ACCOUNTING- AN

EXPLOSIVE MIX

Now we come to the question is it wise to add the adjective ldquoIslamicrdquo to

accounting Why not accounting for Islamic organisations or accounting


U n i t 1 | 10



CIFP

from the Islamic perspective The worry is that the addition of any

religious adjective may compromise the objectivity of the discipline as

religion is mostly seen as an unchanging dogma and code not subject to

pragmatic or logical considerations

We will take this matter in two stages

a) Is conventional accounting value free and objective as it portrayed to

be or is there a hidden adjective attached to it

b) The problem of epistemology- the nature and sources of knowledge

What are the implicit assumptions behind the theory and practice of

conventional accounting in other words ndash what is the worldview behind

conventional accounting Some years back European and communist

states adopted different systems of accounting In a centrally planned or

a socialist state there is a lack of profit motive or not too much of it

Hence the conventional accounting ie profit and loss account balance

sheet did not make much sense in that economic system This is why the

accounting profession never developed in the communist countries It is

only after liberalisation ie conversion to capitalism that these states are

trying to catch up with the West

A little more reflection and we come to the conclusion that the

conventional accounting system in which many of us were educated and

work in is in fact Capitalist Accounting The adjective lsquocapitalistrsquo is not

used before the word accounting because it would then not appear

neutral as capitalism is a philosophy and many ways a religion Its sacred

symbols are private property the hudud (literal meaning the definitive

borders) of the market and its God- wealth for the creation of which


U n i t 1 | 11



CIFP

business and finance exists Capitalism is not only the economic system

which allows choices and opportunities but a philosophy and religion

which forsakes equity for efficiency and the wants of a few for the needs

of the many It can be said to be the dominant lsquoreligionrsquo of the world

(both in Muslim and Non-Muslim countries)

Hence to call a spade a spade accounting should be renamed capitalist

accounting economics as capitalist economics and so forth Hence

faculty of economics in our universities should be renamed faculty of

capitalist economics However we do not do so because it is unnecessary

as it is assumed and implicit Due to the non-explicitness of this

assumption we sometime forget that accounting is not objective neutral

and value-free as it is portrayed to be

Secondly we discuss the problem of epistemology which is the theory of

the nature and sources of knowledge Ever since the lsquoenlightenmentrsquo

period in European history science has gained the upper hand and has

replaced religion as the authority in defining what is knowledge Modern

research emphasises positivism ie what is Knowledge is only what is

perceptible through our senses through observation and experiment or

what appears logical to our mind Revelation is not considered a source

of knowledge as religious truths cannot be verified by our senses

Accounting is considered a science (many US and UK universities use MS

or MSc not MA for post graduate accounting programs) and as such

mixing religion with accounting may be considered unprofessional

However as Chapra (2000) argues science and religion deals with

different levels of reality While sciences deal with the physical universe

perceptible by the senses religion deals with a higher level of reality

which is transcendental and beyond the sense of perception The sources


U n i t 1 | 12



CIFP

of scientific knowledge are reason and its method observation and

experiment It describes and analyzes lsquowhat isrsquo and tries to predict what

will happen in the future (eg forecast earnings from models) When

dealing with the physical universe it is exact in its description and

analysis and more accurate in its predictive power (eg in Physics or

Chemistry) However when it deals with human beings who do not

behave in a consistent manner unlike the revolution of the planets

above its analysis is less precise and its predictions less accurate The

recent move by the Malaysian Securities Commission on insistence of a

+-10 accuracy level on profit forecasts reports by accountants has

given a headache for accountants as forecasting market prices is not an

accurate science as it deals with behaviour of human beings in the

marketplace

Unlike science religion depends on Revelation as well as reason for its

knowledge Its objective is to help transform the human condition from

lsquowhat isrsquo (eg Enron WorldCom) to what should be (perhaps Johnson amp

Johnson under Burke) It should bring about individual and social

change to conform to its worldview values and institutions that it

provides

The ultimate objective of both science and religion is to bring about the

well-being of human beings One addresses the physical and material

while the other addresses the social mental emotional and the spiritual

Chapra (2000) further argues that if both of these are important then

both science and religion can better serve mankind by greater

cooperation and coordination between them Religion can help science

by reminding it of its ultimate objectives and limitations to use the

power and mastery over the universe for well-being rather than


U n i t 1 | 13



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destruction Science can help religion by helping it realise lsquowhat ought to

bersquo by providing a better description of lsquowhat isrsquo facilitating prediction

and providing better technology for a more efficient use of all available

resources

It can thus be seen that rather then becoming an explosive mix the

mixing of science and religion can be fruitful and in fact serve to stabilise

society from the instability of a world dominated either by science or

religion alone Hence we conclude that the addition of the adjective

Islamic before accounting will not affect the objectivity of accounting

14 A PRIMA-FACIE CASE FOR ISLAMIC

ACCOUNTING

Accounting is a tool to achieve certain objectives In order to be useful it

must be relevant to its purpose The purpose of accounting has been

extended by the American Accounting Association in 1975 (presumably

concerned to promote the public interest responsibility of the

profession) which defined the purpose of accounting thus ldquoto permit

informed decisions which will enable scarce resources to be allocated

efficiently thereby achieving social welfarerdquo Hence like it or not the

accounting profession is entrusted with the responsibility of helping to

achieve social welfare by providing its services

It is common sense that one must use the right tool for the right job If

one were to use a sledgehammer to crack a nut the end result would be


U n i t 1 | 14



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paste instead of nuts Hence Islamic accounting may be more

appropriate to achieve the socio-economic and religions objectives of

Islamic institutions and Muslim users The diagram below (Shahul 2001)

shows the situation of match and mismatch

Briefly Islamic institutions (1) such as Islamic banks or the Lembaga

Tabung Haji in Malaysia etc are established to meet the socio-economic

objectives of the Sharirsquoa (Islamic Law) through the implementation of an

Islamic economic and financial system Hence these institutions should

logically use Islamic accounting (2) especially for monitoring these

institutions to achieve their objectives which are different from capitalist

institutions If such a system is used then Muslim users (as homeo

Islamicus) will make decisions in a manner congruent with Islamic

values (3) and will inshaAllah achieve the socioeconomic objectives of

the shariarsquo (4) thereby strengthening the Islamic economic and financial

system (5) However if conventional accounting which developed to

meet the needs of a capitalist economy is used instead in these

institutions (2A) a mismatch is likely This will lead to the institutions

not meeting the Sharirsquoate socio-economic objectives and even worse may

turn these Islamic institutions into capitalist institutions (4A) by

providing materialist profit-focused information instead of the holistic

information provided by Islamic accounting This will lead to Muslim

users making decisions incongruent with Islamic values but congruent

with capitalist values (3A) and thus it is the socio-economic objectives of

the capitalist system (5A) which will be achieved not the socioeconomic

objectives of the shariarsquo


U n i t 1 | 15



CIFP

It can thus be seen that it is not at all unscientific or objectionable to use

Islamic accounting and would in fact be more logical to use it as it

would result in an ethical based accounting system which measures not

only profits but social environmental and religious performance

Finally it must be borne in mind that accounting for Islamic banks and

financial institutions is not Islamic Accounting but only a subset of it

Although the efforts of AAOFI must be commended for developing

standards for Islamic Financial Institutions not all Islamic Institutions

5A THE SOCIO-ECONOMIC OBJECTIVES OF THE

SECULAR CAPITALIST ECONOMIC SYSTEM

4 THE SOCIO -ECONOMIC

OBJECTIVES OF THE

SHARIrsquoA

5 THE ISLAMIC ECONOMIC

SYSTEM amp FINANCIAL

SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC

ACCOUNTING CONSISTENT

WITH ISLAMIC VALUES

3 CONSISTENT DECISION MAKING IN

LINE WITH ISLAMIC NORMS (HOMEO

ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS

2A USE OF CONVENTIONAL

ACCOUNTING BASED ON

SECULAR PHILOSOPHICAL

VALUES INCONSISTENT WITH

ISLAMIC VALUES

3A INCONSISTENT OR DEVIANT DECISION MAKING OF MUSLIM

USERS (HOMEO ECONOMICUS)

Figure 11 RESULT OF INCONGRUENCY BETWEEN ECONOMIC SYSTEM

AND ACCOUNTING SYSTEM SSYSTEMSYSTEMSYSTEM(Source shahul 2001)


U n i t 1 | 16



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are Financial Institutions Islamic accounting is not the just technicalities

of accounting for Islamic financial instruments employed by Islamic

banks but much more requiring whole new areas of performance

measurement including the social environmental economic and the

Sharirsquoate

Figure 12 Components of Islamic Accounting


U n i t 1 | 17



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Summary Point 1

It is contended that Islamic banks require a different accounting system to meet the

objectives for which they were established Failure to use an appropriate Islamic

accounting system may result in their not achieving their socio- economic objectives

as envisaged by their founders and in fact may result in Islamic banks becoming

completely capitalistic institutions

Summary Point 2

The concept of Islamic accountability is a dual accountability concept where in a

situation where investors endow resources to a company run by professional

managers who are contracted to run the company the managers do not only have an

accountability relationship to the investors but also to other stakeholders including

the community and the environment In effect by discharging these dual

accountabilities they are in fact discharging their accountability to Allah or God

Summary Point 3

It is contended that there is no danger in adding the adjective ldquoIslamicrdquo to accounting

as accounting is not value free or objective as generally propounded by its priests

the professional accountants It in fact reflects the values of the socio-economic

system it is developed and used

Summary Point 4

Islamic accounting is sometimes used interchangeably with accounting for Islamic

banks This is strictly not true it covers a broader scope of institutions and practices

such as takaful Islamic businesses waqf and zakat institutions and Islamic

government

Summary


U n i t 1 | 18



CIFP

1 What kind of standards are issued by the

Accounting amp Auditing Organization for Islamic

Financial Institutions (AAOIFI)

A Accounting and Auditing

B Accounting Auditing and

Governance

C Accounting Auditing

Governance and Ethics

and Sharirsquoa

D Accounting Auditing

Governance and Sharirsquoa

2 How is Accounting for Islamic banks related

to Islamic Accounting

A The same as Islamic

Accounting

B Subset of Islamic

Accounting

C The same as accounting

for Islamic financial

institutions

D The same as reporting for

Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP

3 Identify the main pull factor for the

development of Islamic accounting

A The establishment of

Islamic financial

institutions

B The establishment of

Islamic republics

C The establishment of

Islamic business

organizations

D The establishment of

zakat

4 What is NOT a difference between Islamic

And Conventional Accounting

A The objectives of

providing the information

B What type of information

is identified and how is it

measured and valued

recorded and

communicated

C The people who prepare

the accounting reports

D To whom is it


U n i t 1 | 20



CIFP

communicated

5 Identify the category which does NOT fall

under Islamic Accounting

A Accounting for Takaful

B Accounting for Waqfs

C Accounting for Debt

Trading

D Accounting for Islamic

Banking and Financial

Institutions

6 The need for separate a separate field of

Islamic Accounting is based on

A Different Business models

being used by Islamic and

Conventional Institutions

B Different Target Market of

Customers

C Difference in Worldview

on which business

practices and instruments

are based

D Difference in the users

and investors in an

Islamic Bank

7 Which is of the following is a specific

accounting report for Islamic Banks only

A Balance Sheet


U n i t 1 | 21



CIFP

B Statement of Sources and

Uses of Zakat

C Profit amp Loss Statement

D Statement of Changes in

Shareholderrsquos Equity

E

Question 1

a) Discuss the concept of ldquoAllahrsquos bottom linerdquo as enunciated by Shahul and

Karbhari (2007)

b) What Islamic accountingauditing concepts can be inferred from the

verse 2282 from the Al-Qurrsquoan translated below

O ye who believe When ye 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

Allah Has taught him so let him write Let him who incurs the

liability dictate but let him fear His Lord Allah and not

diminish aught of what he owes If they party liable 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 there are not two men then a man and

Questions and Problems


U n i t 1 | 22



CIFP

two women such as ye choose for witnesses so that if one

of them errs the other can remind her 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 juster in the sight of Allah

More suitable as evidence and more convenient to prevent

doubts among yourselves but if it be a transaction which ye

carry out on the spot among yourselves there is no blame on

you if ye reduce it not to writing But take witness whenever

ye make a commercial contract and let neither scribe nor

witness suffer harm If ye do (such harm) it would be

wickedness in you So fear Allah For it is God that teaches

you And Allah is well acquainted with all things (Al Baqarah

2282)

(INCEIF MIF May 2009)

Question 2

Is Islamic accounting and Accounting for islamic banks the same Explain

(INCEIF CIFP Jan2009)

Question 3

i Explain the accounting principles enunciated in the Qurrsquoanic verses 2282 (AL

BAQARAH) and verses 1185-86(Hud) reproduced below in relation to the

primary financial statements ie the Balance Sheet and Income Statement


U n i t 1 | 23



CIFP

2282 O ye who believe When ye 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 Allah Has taught

him so let him write Let him who incurs the liability dictate but let

him fear His Lord Allah and not diminish aught of what he owes If

they party liable 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 there are not two men then a man and two


U n i t 1 | 24



CIFP

women such as ye choose for witnesses so that if one of them errs

the other can remind her 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 juster in

the sight of Allah More suitable as evidence and more convenient to

prevent doubts among yourselves but if it be a transaction which ye

carry out on the spot among yourselves there is no blame on you if

ye reduce it not to writing But take witness whenever ye make a

commercial contract and let neither scribe nor witness suffer harm

If ye do (such harm) it would be wickedness in you So fear Allah

For it is God that teaches you And Allah is well acquainted with all

things

ويا ق وم أوفوا المكيال والميزان بالقسط وال ت بخسوا الناس ( 8811) أشياءهم وال ت عث وا ف األرض مفسدين

ر لكم إن كنتم مؤمنني وما أنا عليكم بفيظ ( 8811) بقية الله خي

Hence O my people [always] give full measure and weight with

equity and do not deprive people of what is rightfully theirs [118] and

do not act wickedly on earth by spreading corruption That which

rests with God [119] is best for you if you but believe [in Him]

However I am not your keeper (Hud 1185-86)

(INCEIF CIFP Jan 2009)

Question 4

Islamic Banks face unique accounting problems both from a technical and

philosophical point of view Describe ANY FOUR (4) of these



U n i t 1 | 25



CIFP

References

Shahul Hameed(2000b) ldquoNurtured by Kufr The underlying philosophic

assumptions of conventional accountingrdquo International Journal of Islamic

Financial Services Vol 2 No2 Sept 2000

Shahul (2002) Islamic Accounting- Accounting for the new Millenium

paper presented at the IIUM International Accounting Conference I Kota

Bahru Kelantan 2001

Haniffa R (2002) Social Reporting Disclosure An Islamic Perspective

Indonesian Management and Accounting Research Vol 1 No2

Shahul Hameed (2000) The need for Islamic Accountinghelliprdquo Unpublished

Phd Dissertation University of Dundee

Shahul Hameed and Yusuf Karbhari (2006)Allahrsquos bottom line

Reorienting Accounting for Islamic Finance Paper presented at the Islamic

Law Symposium School of Oriental and African Studies University of

London

AAOIFI (2011) Statement of Financial Accounting 1 ldquoObjectives of

Financial Accounting for Islamic Banks

Web References

wwwiiumedumyiaw

httpsitesgooglecomsiteislamicaccountingwebHomeintroduction

wwwaaoificom


U n i t 1 | 2



CIFP

Key Terms

Capitalism is an economic system in which the means of production are privately owned and

operated for a private profit decisions regarding supply demand price

distribution and investments are made by private actors in the market

Worldview fundamental cognitive orientation of an individual or society encompassing natural

philosophy fundamental existential and normative postulates or themes values

emotions and ethics

Sharia Islamic Law

AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions

Value free Not altered by value judgements

Hence O my people [always] give full measure and weight with equity and do not deprive people of

what is rightfully theirs and do not act wickedly on earth by spreading corruption That which rests

with God is best for you if you but believe [in Him] However I am not your keeper (Hud 1185-

86)


U n i t 1 | 3



CIFP

Need for Islamic

Accounting













unheard of until



















U n i t 1 | 4



CIFP

11 INTRODUCTION























U n i t 1 | 5



CIFP










transactions)



U n i t 1 | 6



CIFP

Islamic Accounting



discharge their


providing relevant

information on the




















him to Hell










U n i t 1 | 7



CIFP




























U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 3



CIFP

Need for Islamic

Accounting













unheard of until



















U n i t 1 | 4



CIFP

11 INTRODUCTION























U n i t 1 | 5



CIFP










transactions)



U n i t 1 | 6



CIFP

Islamic Accounting



discharge their


providing relevant

information on the




















him to Hell










U n i t 1 | 7



CIFP




























U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 4



CIFP

11 INTRODUCTION























U n i t 1 | 5



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transactions)



U n i t 1 | 6



CIFP

Islamic Accounting



discharge their


providing relevant

information on the




















him to Hell










U n i t 1 | 7



CIFP




























U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 5



CIFP










transactions)



U n i t 1 | 6



CIFP

Islamic Accounting



discharge their


providing relevant

information on the




















him to Hell










U n i t 1 | 7



CIFP




























U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 6



CIFP

Islamic Accounting



discharge their


providing relevant

information on the




















him to Hell










U n i t 1 | 7



CIFP




























U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 7



CIFP




























U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

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OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 8



CIFP










and reported












2000)







U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 9



CIFP






















EXPLOSIVE MIX




U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 10



CIFP



























U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 11



CIFP





























U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 12



CIFP













marketplace






provides










U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 13



CIFP




resources







ACCOUNTING













U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 14



CIFP



























U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 15



CIFP












OBJECTIVES OF THE

SHARIrsquoA



SYSTEM

1 ESTABLISHMENT

OF ISLAMIC SOCIO-

ECONOMIC

INSTITUTIONS

2 USE OF ISLAMIC


WITH ISLAMIC VALUES



ISLAMICUS)

4A CAPITALIST

ECONOMIC

INSTITUTIONS


ACCOUNTING BASED ON



ISLAMIC VALUES






U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 16



CIFP





Sharirsquoate



U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 17



CIFP

Summary Point 1






Summary Point 2







Summary Point 3





Summary Point 4




government

Summary


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 18



CIFP






Governance



and Sharirsquoa






Accounting

B Subset of Islamic

Accounting



institutions


Islamic financial

transactions

Multiple Choice


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 19



CIFP




Islamic financial

institutions


Islamic republics


Islamic business

organizations


zakat



A The objectives of




measured and valued

recorded and

communicated



D To whom is it


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 20



CIFP

communicated






Trading



Institutions







Customers


on which business


are based


and investors in an

Islamic Bank



A Balance Sheet


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 21



CIFP


Uses of Zakat




E

Question 1


Karbhari (2007)















U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 22



CIFP














2282)


Question 2



Question 3





U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 23



CIFP











U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 24



CIFP












things









Question 4





U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom


U n i t 1 | 25



CIFP

References






Bahru Kelantan 2001








London



Web References

wwwiiumedumyiaw


wwwaaoificom

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