Islamic Accounting; History, Development and Prospects

• Main Author: Amela Trokic
• Format: Article
• Language: English
• Published: Università degli Studi di Torino 2015-12-01
• Series: European Journal of Islamic Finance
• Subjects: history; accounting; islamic accounting; finance
• Online Access: https://www.ojs.unito.it/index.php/EJIF/article/view/1043

The main objective of this paper is to discuss the history of Islamic accounting from its emersion to its subsequent development and expected growth in the future. In doing so, the paper will analyze the historic influence of Islamic accounting over its conventional counterpart which dominates the industry today. Moreover, it will provide an analysis of the similarities and differences between Islamic and conventional accounting today from both a theoretical and practical perspective. Based on this comparison the need for an Islamic accounting system, in light of the developing Islamic economic system and the specific needs of its financial institutions which are governed by the Shari’ah, is discussed. Finally, it will look at the prospects of such an accounting system as well as the challenges it faces moving forward. Despite the many strides taken towards developing a comprehensive Islamic accounting system, there are still many challenges which need to be overcome. Nonetheless, the prospects are significant, namely in providing an alternative to the conventional accounting system making it a field worth contributing to.