SHARIAH ACCOUNTING IN THE CONTEXT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Abstract

Shariah accounting is an emerging field that seeks to harmonize Islamic financial principles with conventional accounting practices, particularly International Financial Reporting Standards (IFRS). This paper explores the intersection of Shariah accounting and IFRS, highlighting the challenges and opportunities that arise from their integration. It examines the fundamental principles of Shariah law, the requirements of IFRS, and the implications for financial reporting in Islamic financial institutions. The study employs a qualitative approach, analyzing existing literature and case studies to provide insights into best practices and potential frameworks for aligning Shariah accounting with IFRS. The findings suggest that while there are significant challenges in reconciling the two frameworks, including differences in principles, terminologies, and recognition criteria, a collaborative approach can enhance transparency, accountability, and comparability in Islamic finance. Furthermore, the paper emphasizes the importance of regulatory support, stakeholder engagement, and the development of tailored accounting standards that respect Shariah principles while maintaining global compatibility. This research contributes to the growing discourse on Shariah-compliant financial reporting and offers practical recommendations for policymakers, standard-setters, and financial institutions aiming to bridge the gap between Shariah accounting and IFRS.