Muhammad Akhyar Adnan and Nur Barizah Abu Bakar
The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by…
Abstract
Purpose
The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by relevant corporations. The aim is to determine their appropriateness and adherence to both the Islamic as well as the accounting theoretical perspectives.
Design/methodology/approach
Accounting standards and guidelines related to zakat, including the Financial Accounting Standard No. 9 and the Technical Release i‐1, are examined. Additionally, analyses are made on the practices of Islamic financial institutions to determine their compliance with both standards and ontological aspects of zakat.
Findings
The study reveals that there is a general misconception of zakat, as indicated in several standards and guidelines, which has consequently resulted in inappropriateness in their proposed corporate zakat recognition and measurement and hence presentations. These inaccuracies, in one way or another, have not been in line with the true spirit of zakat in Islam. More worryingly, some unfavorable consequences may and in fact have already been implicated on the larger Muslim community as a result.
Research limitations/implications
An alternative view on the accounting treatment of corporate zakat is offered in this paper with the aim to provide a fair and proper assessment of zakat on corporate wealth, which is more parallel to the true spirit of zakat.
Originality/value
The paper integrates both the revealed and the contemporary accounting knowledge in scrutinizing the standards and practices as well as in recommending an improved and meaningful alternative.
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Nur Barizah Abu Bakar, Suhaiza Ismail and Suaniza Mamat
A strong ethical sense needs to be imbued in potential entrants to the accountancy profession. This paper explores the ethical attitudes of the final year accounting students in…
Abstract
A strong ethical sense needs to be imbued in potential entrants to the accountancy profession. This paper explores the ethical attitudes of the final year accounting students in the International Islamic University Malaysia. There were 210 students who responded to the self‐administered questionnaire survey. Of these respondents, 38 per cent would opt to become whistleblowers. About 3 per cent would accept bribes. Once an element of risk of being caught was introduced, the percentage opting for whistleblowing increased by 6 per cent. However, none chose the bribe option. These responses indicate that only a small porportion of students will depend on punishment and penalty in order to behave ethically. A larger proportion of male students as compared to female tend to behave unethically. The study indicates that the majority of respondents would prefer not to indulge in unethical behavior. The primary contribution of this paper is that it offers insight on Malaysian accountancy students’ ethical attitudes.
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Nur Barizah Abu Bakar, Abdul Rahim Abdul Rahman and Hafiz Majdi Abdul Rashid
PurposeAuditor independence is fundamental to public confidence in financial reporting and the auditing profession. The study aims to provide further understanding of the factors…
Abstract
PurposeAuditor independence is fundamental to public confidence in financial reporting and the auditing profession. The study aims to provide further understanding of the factors influencing auditor independence from the perspective of commercial loan officers. Loan officers formed the sample as they are relatively sophisticated financial statement users who would understand the importance of audit report and the issues related to auditor independence.Design/methodology/approachThe study examines the perceptions of commercial loan officers in Malaysian‐owned commercial banks and a total of 86 officers responded to the self‐administered questionnaire.FindingsResults indicate that smaller audit firms, audit firms operating in a higher level of competitive environments, audit firms serving a given client over a longer duration, larger size of audit fees, audit firms providing managerial advisory services, and, the non‐existence of an audit committee, are perceived as having a higher risk of losing independence. Audit firm size appears to be the most important factor that affects the auditor independence, followed by tenure, competition, audit committee, audit firms providing managerial advisory services and size of audit fee.Originality/valueThe paper provides important insights into the factors affecting auditor independence and contributes towards better understanding on the ways to improve the confidence in financial reporting and credibility of the auditing profession.
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Ram Al Jaffri Saad and Abubakar Umar Farouk
Muslims in Nigeria, like in many Muslim-majority countries, are striving to have a functional Zakat system in search of solutions to the perennial…
Abstract
Purpose
Muslims in Nigeria, like in many Muslim-majority countries, are striving to have a functional Zakat system in search of solutions to the perennial problem of poverty and its damning consequences. Nevertheless, there are still unsettled concerns arising from the current and widespread implementation of dissimilar (diverse) approaches to the Zakat system in various parts of the country. The purpose of this paper is to review comprehensively what are the hindrances of a vibrant Zakat system and how far the identified impediments may affect the system in the Nigerian context.
Design/methodology/approach
The methodology adopted is the review of extant relevant literature in the field of scholarly publications.
Findings
The findings of this study revealed that the fragmented implementation of the Zakat system within the context of the Nigerian democratic system of government lead to the weak governance with respect to law, administration and management; lack of a generally accepted fatwa from the Muslims scholars (Ulamas); absence of Zakat accounting standard; and low compliance behavior are the major barriers that require the attention of government and other stakeholders such as the traditional leaders, the accounting regulatory bodies, the Ulamas, as well as the economic and accounting researchers.
Practical implications
It was recommended that the stakeholders should make concerted efforts toward ensuring success of the Zakat system for attaining salvation in the hereafter and for social security, as well as economic prosperity.
Originality/value
The paper is the first paper that comprehensively reviews previous literature in the Zakat environment on factors that become barriers to implement a comprehensive Zakat system in Nigeria.