CHAPTER 11: SUMMARY, CONCLUSIONS AND SUGGESTIONS FOR

FURTHER RESEARCH

11.0 INTRODUCTION
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.

11.1 AIMS AND OBJECTIVES OF THE 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 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.

11.2 THE CASE FOR AN ISLAMIC ACCOUNTING

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 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 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 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 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 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.

11.3 ISLAMIC ACCOUNTABILITY, THE OBJECTIVES AND CHARACTERISTICS OF

ISLAMIC ACCOUNTING
The researcher adopted a normative-deductive methodology to outline a theory of Islamic
accounting (Chapter 6). This was done after considering the ethical background 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 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.

11.4 RESEARCH DESIGN AND EMPIRICAL RESULTS

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 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
accounting
 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 information.
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 accounting.
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.
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 trading.
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.
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 four.
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 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 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 high.
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.
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.

11.5 LIMITATIONS AND SUGGESTIONS FOR FURTHER RESEARCH

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.
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 any.

11.6 ORIGINAL CONTRIBUTIONS OF THE RESEARCH

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 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 general.
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.
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 researcher.