The Concept of Accounting in Islamic Transactions

The Islamic law of transactions cast down the process and method of accounting and analyzed its fundamental presumptions in present time. There is a need to examine the implications of accounting initiative in Muslim world and attempt to outline the important characteristics of Islamic accounting and how Islamic accounting resolves the problem of measuring the cost of trust sales such as Murabaha products in case of exchange rate variation. The research tends to analyze and discuss the concept of Islamic accounting as well as elaborating jurisprudential matter and demonstrating the practical aspect of accounting in Islamic financial transactions. It also heads for alerting the scholars and practitioners of Islamic accounting in the world entirely, to be familiar with Islamic accounting concept which reflects in Islamic jurisprudence by the virtue of Islamic accounting historical enhancement. The researcher adopted qualitative method as a research methodology by the means of referring to the relevant literature of the subject matter. This is accompanied by discussion and analysis for the material used. It is found that Islamic accounting is relevant and unique in its standard level as it has been qualified by truthfulness, fairness, accuracy in measuring tools, mutual trust, moderation in making profit and tolerance. It was also characterized by flexibility and capacity concerning terminologies and tools invented and applied by Islamic law of transaction through accounting system, which has been valued and described by consistency decisively. The research also found that the claimed idea which signifies that an Italian Mathematician writer know as Luca Pacilio had an initiative in developing the basis of double entry is misconception, due to the existence of Muslim scholars’ work in accounting development dated back to his era. It concludes further that the Islamic law of transaction draws the accounting process and standardized the organizations of a market to be far from usury, cheating, fraud, and unfair and illegitimate competition in commercial fields.