Many economists have made substantial contribution to the thought and practice of Islamic economics, banking and finance as an independent academic discipline of inquiry. The business environment has however created enough scope for academic accountants, professional accountants, accounting practitioners/technicians to create an adequate space with a view to studying and analyzing different postulates and applications for Islamic accounting. The organizations like International Institute of Islamic Thought (IIIT), Verginia (USA), International Islamic University, Malaysia (IIUM), Institute of  Objective Studies (IOS), New Delhi and so on, are at the forefront of intellectual endeavours of promoting thought and knowledge in Islamic perspective. It is appreciable that professional journals, papers and books under the title “Islamic Accounting” are published regularly. It is also in place to mention that in the twelfth century (AD) Ibni Taymiyyah mentioned in his book AL HISBA detailed accounting system used by Muslims as early as seventh century (AD). These accounting practices were influenced by Roaman and Persian civilizations that Muslims interacted with. Accounting is the language of business and in the present context it reflects:
That fundamental principle on which the entire structure rests under this system is “fair and just”. The system not only appreciates and encourages  but primarily demands total transparency in, and disclosure of, business operations.
That qualified audit reports have least place under the Islamic accounting system simply because of the fact that neither any piece of information is concealed nor any deviations are made from the well set standards.
That an inherent beauty of Islamic accounting is that it helps to ensure a good corporate governance and makes the people accountable as per an analysis of corporate financials.
That accountants and auditors under this system inter alia need to develop an understanding through extensive training in the concepts like creative accounting in relation to accounting ethics.
The word ‘ethics’ refers to a set of moral principles or moral philosophy and standards of conduct. What is legal in one system may be unethical in another as a matter of conscience. The education in Islamic social system shapes the individuals in such a way that they can make efforts to protect the society from evil and enrich it with good. The accounting education accordingly sensitizes stakeholders  to gain enough exposure to replace bad practices  by following good practices. Thus, unfair practices in whatsoever form do not creep in any branch of Islamic accounting. Every accounting unit (monetary as well as physical) is therefore given a fair treatment to prove the best fit in this system of accounting. Financial intermediations based on the tenets of Shariah are where ethical and moral aspects are most visible. The important educational effects under this system are that the stakeholders are good and honest in their dealings and always honour their commitments and never cheat each other. The Sahriah compliant maintains a balanced economic life without indulgence in opulence, luxury and expensive pleasure, but works hard is productive and prudent, assists the needy, saves his money and invests it profitably. Shariah imposes no ceiling on profit or price but monopoly and abuse are non-existent. Accordingly, the annual financial statements show a true and fair view of state of affairs of the business in a real sense and true spirit and not in word alone.
The Islamic accounting has advanced from early attempts focused on the principles and problems defining now to more specific methodological issues which include articulating the Islamic paradigm of knowledge. As for instance, the fundamental promise is to create a win-win situation or I-am-okay-you-are-okay position for the stakeholders. The methodology adopted thus is Value Added Accounting based on co-operation. The stakeholders enjoy horizontal relationship and equal care for all. Conversely, the conventional   Profit and Loss Account reflects win-lose situation or I-am okay-you-are-not-okay as a sequel to competition among different stakeholders who are vertically related as there is always a clash of vested interests. The Shariah compliant companies thus construct their corporate annual reports based on Islamic accounting. In this regard more and more survey based exploratory studies need to be attempted by the academic accountants.

(Dr. Nazir Ahmad Gilkar is Principal, Govt. Degree College, Sogam (Lolab), Kashmir. He can be mailed at gilkarna@rediffmail.com)

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