Should Islamic Accounting Standard Follow to International Financial Reporting Standards (Ifrs)? a Lesson From Malaysia

Abstract

It has been clearly shown that financing based Islamic teaching has inherentcharacteristics as well as its accounting. For that reason, it may not be so easy toconvert Islamic accounting standard into International Financial ReportingStandard (IFRS) as it may violate some basic principles of Islamic teaching.Accounting and Auditing Organization for Islamic Financial Institution (AAOIFI)still commits to have different accounting standard as it is based on the fiqh(maxims). Furthermore, some countries adopt directly or indirectly the concept inIFRS, for example, in Malaysia. This paper tries to show some evidences onaccounting standard which does not have a strong foundation of Islamic teachingwould like probably to change by its milieu, especially in the IFRS convergencetrend. This is because Islamic accounting standard itself merely based on “theconvention” of the so called Islamic scholars