Growth in interest in Islamic Accounting  – guest seminar

There has been a marked growth in interest in Islamic accounting over the past ten years. Although not a topic which is specifically taught within the business school, it is a definite subject of interest among academics of the newest research centre, the Centre for Accounting and Accountability (CAAR).

Centre director, Professor Roszaini Haniffa, invited Professor Christopher Napier, co-editor of her new book Islamic Accounting, to present a guest seminar on the topic. Academics and researchers from across the school attended to hear Professor Napier’s view on what Islamic accounting is and why there has been such a growth in recent years.

Professor Napier said: ‘Islamic accounting is not a different system to traditional accounting but looks at it from different angles. The practice is very similar, but the transactions on which we focus are different.

‘In Islamic accounting, the core responsibility is to God and the belief is that everyone is ultimately accountable to God at the end of their lives for everything that they have done in their life.’

‘One of the main differences is that Islam prohibits the charging of interest, which means that Islamic institutions have to develop their products to avoid paying or receiving interest. That means that when we are developing Islamic accounting standards, it is really providing guidance to businesses as to how to account for these transactions, which are rather specialised in comparison to what banks usually do.’

He continued: ‘Interest in Islamic finance is increasing. This can be explained partly by the development of the economies in Muslim majority countries. It is also explained by the ongoing intellectual development, for example, international students who have studied in Western universities and now want to apply what they have learned in an Islamic context, to see their ideas through an Islamic lens.’

‘The first generation of thinkers about Islamic accounting were very often Western scholars supervising PhD students in this area. We are now into the stage where there is a second generation of academics researching Islamic accounting who are based in the Middle East and South East Asia, where Islamic accounting is both important and well used.’

‘In the UK, the influence of PhD students coming to study in this country has been very important in the growth of this area. There must be at least 100 PhD students in the UK currently studying Islamic accounting, banking and finance. Their supervisors will often be people who hadn’t realised that it was such an interesting area – this is how I started.’

‘Islamic accounting is a massive area of research and one in which researchers will continue to have interest for years to come.’ 

Professor Napier’s seminar was one of the activities organised by the CAAR. 'Islamic Accounting', edited by Professor Christopher Napier and Professor Roszaini Haniffa, is published by Edward Elgar publishing.

Professor Haniffa is also editor of the Journal of Islamic Accounting and Business Research (JIABR).

Added 30 January 2012