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ISLAMIC VS CONVENTIONAL ACCOUNTING

Islamic Accounting Accounting process which
provides appropriate information to stakeholders of
an entity which will enable them to ensure that the
entity is continuously operating within the bound
of the Islamic Shariah and delivering its
socioeconomic objectives.
Conventional Accounting Identification,
recording, classification, interpreting and
communication of economic events to permits users
to make decisions.
1. The objective of providing the information.
2. Types of information that are identified.
3. How is it measured?
4. User of the information

Conventional Accounting As an
aid to make decision whose
ultimate purpose is to efficiently
allocate scarce resources
available to their most efficient
uses by providing information
efficiency in the market.
Islamic Accounting Enable user
to ensure that Islamic
organisations abide by the
principles of the Shariah in its
dealings and enables the
assesment of whether the
objectives of the organisations
are being met.
a.
Concentrate
b. Reason
Conventional Accounting Islamic Accounting
identifying economic events
and transactions
identifying socio-economic
and religious events and
transactions.

Americanization of the
curriculum has popularized
the term financial
statements. Hence, the
concentration of accounting
has moved from stewards
manorial account to
accounting for money

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
Historic cost to measure and values assets
and liabilities.
Arose from the needs of bankers and
shareholders.
Interest-based bankers who are interested -
capital and interest are repaid.
Valuation of assets-historical cost but
anticipating all liabilities in conservatism
concepts .



Islamic Accounting
Computation of zakat- current valuation is
obligatory.
Zakat based on historical cost valuation
would yield lower receipts in times of
inflation or rising costs.
Current values would satisfy Islams concept
of justice.

ISLAMIC ACCOUNTING
CONVENTIONAL
ACCOUNTING
CONVENTIONAL ACCOUNTING ISLAMIC ACCOUNTING
Shareholders
Creditors
Elite group of financer
Market player
Banker
Other institution
Reason:-
Helping a group of rich
people get richer
Gamut of stakeholder
recognized by cooperate
report
Reason:-
Ensure they comply with
shariah principle
Do not harm other while
making money ethically
Achieve equitable
allocation and distribution
of wealth among members
of society

The uniqueness of Islam lies in its practicalities - not
merely a belief but is a complete way of life.
This can be analogically be seen from Islamic faith
whereby for every human, 2 angels accompanied them at
right and left shoulders, record every good deeds and sins
(the double-entry bookkeeping principles?)
mentioned comprehensively in Quranic verses, portrayed
to shoulder responsibility of social and economic justice
In recent years - conventional accounting - suffers from
the lack of desirable information.
The objectives of Islamic accounting - avoidance of doubts
and consequently to ensure fairness between all relevant
parties and equitable transfer and distribution transfer and
distribution of property rights and wealth.

CONCLUSION
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