Prepare by:

Zul Husni Bin Ag Damit Mohd Hafiz Bin Amat Muhammad Hafizuddin Bin Shamsuddin Madsan Bin Salimeu

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.
2. 3. 4.

The objective of providing the information. Types of information that are identified. How is it measured? 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.

Concentrate

a.

b. Reason

Conventional Accounting

Islamic Accounting

identifying economic events identifying socio-economic and transactions 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 nonfinancial 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

Gamut

Creditors
Elite

group of financer

Market player Banker Other institution

Reason: Helping

a group of rich people get richer

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

CONCLUSION

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.

 See

you in other occasions