Religion as a Source of Islamic Ethics and its Impact on the Islamic Accounting System

Małgorzata M.E Czerny

doi:10.18778/0208-6018.355.02

Abstract

The article introduces religion as a source of Muslim ethics and shows how it is shaping the system of Islamic accounting and the ethical behaviour of Muslim accountants. Cultural differences are an increasingly important factor to be taken into account in running a business. They are also the subject of scientific research, for example, in the context of their impact on the development of accounting systems in various cultural circles. The relevant reference literature and the Qur’an were used for qualitative analysis carried out by means of induction and deduction methods. The analysis conducted indicates that although the scope of ethical codes in Muslim and non‑Muslim countries is very similar, in the case of Islam, its message is strengthened by religion seen as a source of law as well as professional ethics. This means that the legal sanctions envisaged for breaking the rules are accompanied by the fear of being excluded from the community and losing an opportunity for salvation. This article can fulfill an informative role, allowing the reader to understand the reasons for some differences in perceiving ethical issues and the way of doing business in different cultural circles.

Highlights

Accountability may be defined as ‘the fact or condition of being accountable,’ whereby accountable means ‘required or expected to justify actions or decisions’ or ‘responsibility.’ In the accounting profession, the main objective is ‘to aid accountability’ (Lewis, 2001)
It is necessary to present some dogmas of Islam and their impact on Sharia, as Islamic law and ethics have the same sources, and Sharia is closely connected with the Muslim ethical code
Using the accounting system, Islamic business units should disclose: – all economic transactions carried out and prohibited by the Qur’an; – the obligations derived from zakat and the basis for its calculation; – activities in the area of social responsibility

Summary

Introduction

Accountability may be defined as ‘the fact or condition of being accountable,’ whereby accountable means ‘required or expected to justify actions or decisions’ or ‘responsibility.’ In the accounting profession, the main objective is ‘to aid accountability’ (Lewis, 2001). An accountant must maintain confidentiality without disclosing any information to outside companies and refraining from using it for personal gain When it comes to professional behaviour, an accountant should avoid any action that would discredit the profession. In the Islamic law (Sharia), the accounting profession is a fardkifayah, which means ‛a collective religious duty.’. The paper aims to show the Muslim point of view on ethics in accounting and how religious beliefs that are the foundation of Sharia law as well as the basis for the Muslim code of ethics are shaping ethical behaviour of Muslim accountants and the accounting system in Islamic countries, its role and main tasks. It is necessary to present some dogmas of Islam and their impact on Sharia, as Islamic law and ethics have the same sources, and Sharia is closely connected with the Muslim ethical code

Islamic law – Sharia and its religious sources

Sources of Islamic ethics

Islamic ethics and accounting and its financial environment

Disclosures

Islamic ethics and accountants

Conclusions