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Analysis of Results

• What are the user needs for accounting information in the UAE Islamic banks?
• Do Islamic banks in the UAE need a corresponding alternative set of Accounting Standards?
• Is the Fatwa & Shariah Supervisory Board sufficient to ensure the Islamic banks’ compliance with Shariah in the UAE?
• What are the underlying factors that may influence the adoption of AAOIFI Accounting Standards in the UAE Islamic banks, and which issues might act as barriers to their adoption?
• Identify the main challenges in adopting AAOIFI Accounting Standards? What problems and difficulties would UAE Islamic banks face when applying AAOIFI Accounting Standards?
• What factors can influence, and the benefits that may arise from, the adoption of AAOIFI Accounting Standards in the UAE Islamic banks?

This particular chapter will be discussing the combined outcomes of the two different methods of research chosen for the purpose of this research that are interviews and questionnaires. These two methods had been used for exploring the appropriateness of applying AAOIFI Accounting Standards on the Islamic Banks. The results understood with the help of these methods had been explained in the last chapter, discussion of results. The organization of these chapters had been done by examining and discussing the key users of accounting in the Islamic Banks and their needs of accounting, along with the views of respondents regarding the adoption and suitability of AAOIFI in the Islamic banks. Further ahead, other sections will be discussing the issues of culture that may behave as barriers and challenges in fully adopting the AAOIFI in the Islamic banks. The next section will be exploring the costs and difficulties that other listed organizations will be facing in the duration of transitioning to the accounting standards of AAOIFI. The final section will be discussing the advantages that result in adopting the accounting standards of AAOIFI.

This section will be presenting the findings related to the study. These findings with respect to the key users of accounting in Islam and their needs of accounting. This section will first be identifying the key users of financial reports in organizations, and then there will be discussion created regarding the needs of users. The appropriateness of AAOIFI to Islam will be examined, along with a discussion created on the parties who may effect and be beneficial for the adoption of AAOIFI in the Islamic Banks.

As evident from the review of literature, it has been found that reporting of finance should contribute in providing important information and data for the users in order to assist them in the process of decision making. This is the key objective being targeted by AAOIFI. It is a belief of certain researchers that the creditors and the investors are the most relevant users in reporting of finance (Ainley 2007). However, in accordance with the Islamic framework of accountability, this is not the same situation in the society of ISLAM as each and every single user that includes the society, is supposed to be considered, and hence, it is relevant that there must be disclosure of information to the society on the whole.

Accounting Standards and Information Needs in ISLAM

In addition to this, all factual and true information, also information within the disfavor of firms, needs to be disclosed.

These key users were a listed company, and the other was a bank. A suggestion can be provided that even though the organizations of ISLAM make attempts on following the requirements of sharia, they might still be in conflict with it in ignorance towards the interest of society and then, the practice in accordance with the framework of accountability is restricted. In addition to this, the findings contribute in suggesting that the organizations of ISLAM made an addition of DZIT as being one of the key users as these contribute in recognizing them as the key group (Ainley 2007).

It has been commented by one of the analysts of finance that in ISLAM, in consideration with private investors of institute, a number of difficulties are faced to find adequate disclosure, which cannot be considered as the case in comparison with the other investors who hold power and contribute in protecting their rights, like the DZIT and all investors in the government institutes (Ainley 2007). It has also been mentioned that the only organizations that provide significant information, and specific disclosure, had been the ones that contribute in implementing corporate guidelines of governance. Only the sector of banking has been identified as appropriately implementing the corporate system of governance, in contradiction with the other organizations in related sectors like the sectors of industry and services. These organizations contribute in representing fewer in comparison with the fact the 10 per cent of the organizations in the market of ISLAM (Ainley 2007). Therefore, it may contribute in suggesting that the entire organizations do not contribute in providing appropriate disclosure of information in front of the users.

Two of the interviews mentioned above contributed in adding that even though there is inappropriate disclosure, there has been improvement in the disclosure since the past three years, as a matter of fact, as the authority of capital market has been developed. With respect to this, the analysis of finance may consist of additional information from the authority of capital market along with the financial reports of organizations.

It has been mentioned by the analysts of finance that when there had been establishment of this particular authority, in the year 2003, there had been encouragement of listed organization over the stock market of ISLAM and to monitor their disclosure. Hence, there was increase in the needs for having information to assist the investors.

As a concluding point, it can be stated that improvements with respect to disclosure since the development of this authority, majority of the users and participants of this particular study had still been dissatisfied with the present degrees of information transparency and disclosure in terms of practicality.

Therefore, the above findings contribute in suggesting that complete disclosure that is relevant from the perspective of Sharia, can be considered as being restricted. This particular finding cannot be strongly in consistency with the framework adopted for the usefulness of decision by certain bodies that include CAM, IAS and SAMA (Archer 2007). These hold the responsibility to control and enforce the regulations of accounting. Thus, this contributes in suggesting that the ability of users for making appropriate decisions will be affected by it. In addition to this, suggestion can also be provided that the present degrees of transparency and disclosure are related with the preparers of accounts, but not with respect to the preferences of users. Therefore, this contributes in providing a suggestion that information is disclosed by preparers on the basis of their interest, even with respect to those that hold appropriate power. This is due to the fact that higher disclosure results in competitive benefits (Archer 2005). Hence, it can also be stated that the preparers of accounts hold more ability in comparison with the users of accounting, for protecting their interests and hold huge ability of lobbying the regulations of accounting at present in ISLAM.

Adoption of International Accounting Standards

However, in comparison with the financial reports of banks prepared within the AAOIFI and the ones of other listed organizations prepared within IASs, the responsibility of which is held by the IAS, users of accounting contributed in agreeing to the fact that the reports of finance prepared under AAOIFI contribute in providing more information in comparison with the ones prepared under IASs. In addition to this, all factual and true information, also information within the disfavor of firms, needs to be disclosed (IASC 1989). This contributes in providing an implication that the society of ISLAM has the tendency of representing the relevant stakeholders. The respective study contributed in indicating that the key groups of users in ISLAM are investors of institute, analysts of finance, the department of Income Tax and Zakat, individual or personal investors, creditors, academics within the field of accounting, and the government.

Hence, it can be stated that majority of the users show preferences towards those financial reports that have been prepared under AAOIFI. This contributes in implying that SAMA is extremely strong and holds more capability for the body of regulation in comparison with the IAS.

Most of the respondents to both of the interviews and questionnaires tend to be supporting the adoption of AAOIFI in ISLAM, as each and every standard will be involving better satisfaction in the accounting needs of the nation. In addition to this, respondents had been seen to be agreeing to the fact that AAOIFI have appropriate and desired benefits in comparison with the IASs (Mallat 2008). However, it had been belief of certain respondents that not all of the accounting standards of AAOIFI hold the suitability for the environment of ISLAM as certain standards may have been considered difficult for applying, or, at least with respect to theory, may not hold the compatibility with the culture of ISLAM, or may be conflicting the law of commercialization.

However, it has been identified that the interviewees started showing willingness for the bodies of regulation in ISLAM would be working more closely and making attempts for improving disclosure of information for the investors. It has been stated by one of the interviewees that this authority should be working closely and more with the ministry of commerce for updating the regulations of accounting and obliging the organizations in the stock market of ISLAM for implementing the regulations that assist the investors in the stock market of ISLAM for making their decision (Briston 2000).

However, there is instead its existence as it had been feeling of respondents that felt the needs of users, and the principles in Islamic systems, do not seem to be having higher influence and impact over IASs in the current consideration. It has been mentioned by some of the interviews that certain specifications or features for ISLAM as an Islamic nation cannot be considered as being a part of present issues (Bryer 2003). As a significant example, one of the participants held the opinion that there had been no issue related to religious consideration, at minimum from the perception that would be creating conflicts between the Islamic Law and AAOIFI (Hitchins 2005). In addition to this, one setter of standard held the belief that even the standard of Zakat in IASs has restricted impact on the requirements of sharia, and AAOIFI held more benefits in comparison with the IASs.

Perceptions of the Characteristics of IAS

Dubai Islamic Bank Pakistan Limited

There is complete agreement in the fact that on adopting the AAOIFI may result to make more detailed availability of disclosure and more information for disclosure even in the general context. However, the parties at external levels will attain more advantages in comparison with what can be seen from the adoption of AAOIFI in comparison with the parties at internal level.

With respect to this, the results of questionnaire contribute in indicating that there had been involvement of significant differences amongst the respondents from other listed organizations and banks with respect to the advantages of adopting the AAOIFI to the needs of local users. Other listed organizations reported a higher degree of agreement with respect to the respondents from the sector of banking, who tend to be showing lower degree of agreement, majority of them had been seen to be indifferent. This also contributes in giving rise to a significant need as there was unwillingness or inability for protection of interests in the society (Mallat 2008). In addition to this, certain interviewees contributed in mentioning that there is lack of regulations to help in protecting the interest of the society, specifically with respect to the fact that the society does not tend to hold the power for protecting their own individual and personal interests in the organizations of ISLAM.

It had been stated by one of the interviewee that this may be due to the fact that the respondents from listed organization thought that he AAOIFI may be providing more disclosure in comparison with the IASs currently being considered by each and every single listed organization. In addition to this, some interviewees from the sector of banking tend to believe that the advantages of AAOIFI are highly dependent on the education level of users and their understanding and familiarity of the AAOIFI. Apart from this, it is a belief that majority of the users of financial reporting will not be noticing the changes that take place in reporting of finance if there are changes made in the standards of accounting (Hoarau 2005).

It has been mentioned by majority of the respondents that the increased involvement of FDI had been one of the biggest advantages regarding the adoption of AAOIFI in ISLAM and at the same point of time the biggest impact over their potentiality for being adopted within the nation. It has been stated by one of the participant who is also an auditor that it is not compulsory for adopting AAOIFI, but it will help the foreign investors for coming in is an obvious understanding regarding the foreign standards set. As more individuals go within the bonds issues highly, there will be an increased need for using the frameworks of accounting that have been understood highly across the globe in comparison with the utilization of accounting standards in ISLAM (Mallat 2008). As if an organization SABC ends up going and issuing a bond within the global market, there is an increased need for preparing financial statement that can be understood more widely across the globe in comparison with the ones on the basis of accounting standards in ISLAM.

Perceptions of factors that Influenced the Adoption

Based on the review of literature, it can be stated that this contributes in providing a suggestion that information is disclosed by preparers on the basis of their interest, even with respect to those that hold appropriate power (Dale 2007). This is due to the fact that higher disclosure results in competitive benefits. Hence, it can also be stated that the preparers of accounts hold more ability in comparison with the users of accounting, for protecting their interests and hold huge ability of lobbying the regulations of accounting at present in ISLAM (Karim 2009). It has been argued by certain previous studies that a number of developing nations have recently been making attempts for attraction of international investment and hence unlikely for setting the standards of accounting, which even though can be considered as being suitable for the requirements of nation, could be deterring the international investors.

It seems to be evident from the presentation of findings within the further sections that factors of religion and local needs have restricted impact over the IASs (IASC 1989). This will also contribute in the facilitation of processes in order to adopt the AAOIFI that are those economic factors having major influence in comparison with the factors of religion that contribute in shaping the factors. This is done while choice made regarding standards of accounting in ISLAM.

FDI involvement in Islam

There is complete agreement in the fact that on adopting the AAOIFI may result to make more detailed availability of disclosure and more information for disclosure even in the general context. However, the parties at external levels will attain more advantages in comparison with what can be seen from the adoption of AAOIFI in comparison with the parties at internal level.

With respect to this results, these tend to having a significant impact over the practices of accounting and also impact the option being chosen for standards of accounting in ISLAM. In ISLAM, in specific sense, the big four will be beneficial for adopting the AAOIFI as there seems to be an absence of knowledge (Hoarau 2005). This absence of knowledge is regarding these standards amongst majority of the accountants in ISLAM. Hence, it can be stated that Big Four will be holding the position of increasing their income by making offer regarding the services of training, consultancy and even more. The interpretation of this could be done as being one of the main primary motivations in order to provide support to the adoption of AAOIFI. It can also be considered that there is existence of strong relationship between big firms of accounting, MNCs and FDI, as they are known to be working to adopt AAOIFI. However, it has been argued by some that desire and confidence of investors shows being reliability towards the auditing of financial statements (Karim 2007). This is by the international firms of accounting in affiliation with one of the biggest AAOIFI in comparison with the ones audited by the local firms of accounting in the absence of this type of an affiliation.

Perceptions of Demerits and Merits of Adoption

This may contribute in explaining the requirement of SAMA that a minimum of one of the auditors at external level are in appointment with the banking sector of ISLAM for reporting of finance being done by any firms from the big four organizations. In total, it can be considered that the system of accounting in ISLAM may contribute in being driven through the needs of foreign investment instead of the needs of accounting (Karim 2009). This result contributes in providing a confirmation in comparison with the results drafted within the study. This contribute in indicating that impact of the needs of local users and principles of ISLAM over developing the IASs is considered to be restricted and limited.

At the same point of time, the needs of local users and principles of ISLAM seem to be having restricted impact over or beneficial to adopt the AAOIFI, as mentioned previously and will be discussed in detail further ahead. But one of the key advantage of having AAOIFI is for increasing the degree of disclosure in basic context. This may contribute in serving the needs of local users. The above stated findings hence have less consistency with the objectives of accounting in ISLAM as an Islamic nation, and in alignment with the Islamic theory. However, the accounting should be providing complete disclosure and will be serving the local needs, specifically the requirements of religion like the Zakat (Benston 2000).

Apart from the advantages of adopting AAOIFI to the FDI, majority of the respondents contributed in suggesting that the international firms of accounting and multinational organizations will be beneficial from the complete adoption of AAOIFI and at the same point of time, are known to be having huge influence over the scope of adoptions (Dale 2007).

It had been a belief of certain respondents that not all of the accounting standards of AAOIFI hold the suitability for the environment of ISLAM as certain standards may have been considered difficult for applying, or, at least with respect to theory, may not hold the compatibility with the culture of ISLAM, or may be conflicting the law of commercialization (FASB, 1998). However, one significant question that arises out of this is that whether these particular standards can be considered as being adequate for ISLAM, and it can be considered as a developing nation within which the needs of accounting may be different from the ones in developing nations, as the needs of accounting are in relation to a number of factors, like society, culture, and so forth (IASC 1989).

There is clarity in the review of literature that Islam can be considered as the factor that influence regulations of accounting in the nations of Islam like ISLAM. This may also contribute in the production of systems of accounting within these nations that hold significant differences from the systems of accounting in developed nations which there is no existence of this type of factor (Karim 2007). The key objective related to accounting from the perspective of Islam in the societies of Islam is enabling each and every single Muslim for the determination of value of Zakat being owed by them. These are then put into practice by the Islamic framework of accountability as that has been described in the previous context. The Department of Income Tax and Zakat had been identified as considered one of the key users for reporting on finance, and the one that contributed in wielding considerable impact because of the authorities under government bodies (Errico 2001).

The finding then contribute in suggesting that the economic consequences will be causing ISLAM for the adoption of AAOIFI as the government of ISLAM has been paying more attention towards the attraction of FDI. In addition to this, it will be providing the financial reports needed by the FDI, irrespective of the needs of the local users, due to the fact that these particular needs will not be taking into consideration the regulators of accounting (Heffernan 2003). It seems to be evident from the presentation of findings within the further sections that factors of religion and local needs have restricted impact over the IASs.

The needs of accounting can be considered as being different in developing nations in comparison with the ones in developed nations, due to the differences of culture along with a number of other factors. With respect to this result, standards of accounting impacted by developed nations, due to the differences in culture and in relation with other factors. With respect to this result, standards of accounting impacted by the needs of developed nations like AAOIFI, may not be hold the suitability for ISLAM (Hoarau 2005).

However, the findings may contribute in suggesting that the factor of Islam will not be representing a barrier or challenge towards adopting the systems of accounting from the developed nations, like AAOIFI, for a number of reasons. An argument can be placed that adoption of AAOIFI by developing nations may appear to be important for these standards in accounting of finance, or as the requirements of financial reporting for provision of investors with important information of accounting. However, the profession of accounting in developing nations may be facing huge constraints with respect to their adoption (Karim 2009). The finding contributed in suggesting that even though the organizations of ISLAM make attempts on following the requirements of sharia, they might still be in conflict with it in ignorance towards the interest of society and then, the practice in accordance with the framework of accountability is restricted.

Firstly this particular study contributes in suggesting that the impact of Sharia law over the practices of accounting or business is restricted in a significant manner. One significant example related to the disadvantages of the role played by Sharia within the accounting system of ISLAM is that particular interest that is present in certain transactions related to the listed companies in ISLAM (IASC 1989). In addition to this, it can also be stated that IASs hold a restricted consideration regarding Sharia Law and that existing system of accounting holds a restricted liability for the provision of adequate information for the Zakat. As an additional significant impact, the impact of developed nations has been becoming apparent in regulating the systems of accounting and businesses in ISLAM, which may contribute in facilitating the adoption of AAOIFI (Haskins 2004).

The comprehensive survey of questionnaire had been distributed for managers and professional in all of the banks of Islam that were part of the survey. The questions within the questionnaire had been scored and constructed in different ways. Considering the results analyzed, it can be stated that according three participants, there were no factors of differentiation for the services of Islam. The main factors of concern have been identified as culture, religion, ethics, and cheap services. It had been indicated by all of the respondents that the accounting standards adopted currently are IAS and this had been confirmed by 100 per cent of the respondents. Based on the questionnaire conducted, it can be stated that in general sense, these accounting standards can be applied in developing nations and have been created for meeting the specific needs of developed nations. The accounting standards by IAS contribute in providing the characteristics of comparability and understandability with respect to the banks of Islam. However, there had been 21 per cent of the respondents to oppose this point. Certain factors had been identified that effect the adoption of IAS by the banks of Islam. The measurement had been done with the help of likert scale from the 0 to 5. Majority of the answers received had been average and moderately positive. However approximately 2 per cent of the respondents stated negative scores that makes the result quiet contradictory. The questionnaire had been set for raising the questions related how the practitioners of the industry are currently dealing with the general issues of IAS specifically the value of time with respect to money. In addition to this, request had been made for identifying the transactions being perceived by them as being different from the operational activities of the respective accounting standards along with provision of information regarding the institution has been dealing with it. The practitioners of industry had been requested for providing their comments and feedback regarding particular transactions in relation with the accounting standards of IAS. The key problems and issues discussed in the duration of interview that had been grouped within several themes. An analysis of themes had been conducted over the patterns and themes related to the responses of interviewees.

Feedbacks and responses had been sought from the accountants and officers from the banks of Islam and academicians and operators of Takaful within the session of group interview. In the duration of interviews, specific and unique issues had been identified with respect to the technical application involved in IAS when records were being made for particular financial transactions of Islam like Ijarah, presenting the statements of finance for the operators of Takaful, contracts of profit sharing and the similar ones. From the session of the interview, there had been agreement from the interviewees in an unanimous manner. These issues are as follows:

• Entries and concepts of accounting are not the key determinants regarding the validity held by the compliant financial contracts under Shariah.
• There had been full compliance by the interviewees for resolving the Advisory Council of Shariah over BNM on the permissibility of Shariah regarding the underlying assumptions or general concepts. These are the applicability related to substance in comparison with form, probability and fair value, and value of time for money while recording the financial transactions of Islam.
• Shariah does contribute in allowing the task for applying the value of time with respect to the principle of money only for contract of exchange, where there is involvement of deferred payments. However, it can be stated that there is strict prohibition in transactions based on debt.
• There are two key models of banking in Islam that are present in the industry of banking in Islam. These models are trading model and financing model. Whatever model that is utilized by the respective banks of Islam needs to be reflected as to how their activities of business hold accountability in their system of financial reporting.

Further analysis had been performed for highlighting the value of frequency of a basic theme being discussed within the session of interview. The issues of Shariah had existed when there is application of IAS like utilizing a specific terminology in the standards of accounting that literally provide a reflection on the conventional terms of banking for being applied for the operations of takaful and banking of Islam. In addition to this, it had also been pointed out by the practitioners that there are technical issues involved in the application of IAS for being applied to record specific transactions of takaful. Some of the concerns of interviewees had been in relation to apply the definition of insurance over the operations of takaful, the concept related to leasing had been done for Ijarah and value of time had been applies in relation with money to record the instruments of finance. It had been highlighted by the interviewees that regulators like the BNM contributed in playing a significant role in the provision of guidelines and reports in consideration with the issues of Shariah when reporting and recording the financial transactions of Islam. As the IAS are extremely regulated in a significant manner, there is an expectation that the decisions on reporting made by the IAS are usually on the basis of the requirements related to disclosure issues by MASB as well as BNM. It had been a belief of the interviewees that the banking of Islam can be on the basis of a trading or financing model. In the model of financing, banks of Islam purely focused on providing financing on the basis of Shariah. In addition to this, the interviewees showed concern towards the possible chances of IAS not with the application of AAOIFI for particular financial transactions of Islam like accounting of Takaful, or should there be a different framework of accounting in order to record the financial transactions of Islam. As IAS are extremely regulated, it had been opined by the interviewees that it is most appropriate for them to be waiting for standards and guidelines from MASB and BNM. In the general context, it had been a belief of the practitioners in IAS that there would be issues of Shariah when there is application of IAS in order to record the financial transactions of Islam. However, as these findings only contribute in representing the restricted number of IAS, research in the future should be making attempts for obtaining feedback and responses from all accounting standards that include the advisers or consultants of Shariah, related auditors, accountants, MASB and BNM. Hence, it can be concluded that the key findings of this research helped in revealing a significant point that the accounting standards developers in ISLAM have indicated that reports with financial data have to be developed for investors, analysts, collaborative creditors and the government agencies.

This particular study has contributed in showing that there is occurrence of transactions where there is involvement of interest. As an initial point, there is existence of interest in certain transactions related to the back of ISLAM. The respondents of questionnaire from the sector of banking agreed that there had been occurrence of transactions involving interest. Each and every single interviewee also confirmed that certain transactions of banking are impacted by the interest. It had been commented by one of the interviewee that in an unfortunate manner, the organizations of ISLAM usually involve failure in considering the key interests of the society that is supposed to be considered as being extremely important. There are only small number of organizations that have been making attempts for discharging their responsibility and roles in holding the accountability with respect to this society.

In addition to this, even though the banks of ISLAM make attempts of following the requirements of Sharia, certain back, involving the ones representing themselves as being significant deal related to the complaint of Sharia but may be different in comparison with the other banks. These are done by providing the interest being imposed towards charity. As evident from the review of literature, it has been found that reporting of finance should contribute in providing important information and data for the users in order to assist them in the process of decision making (Hussein 2004). This is the key objective being targeted by AAOIFI. It is a belief of certain researchers that the creditors and the investors are the most relevant users in reporting of finance.

When it had been asked by the research whether there is application of interest towards late amount of payments, even if they seemed to be mistaking the role played by the customers. This may result in ensuring that the banks are same in comparison with the banks in traditional sector (Moore 2007). It has been mentioned by one of the respondent that his bank does not provide amount of loans with the involvement of interest, however, other banks provide loan amount with the involvement of interest.

The interest being charges in situations of error from customer is provided towards charity. It has been noticed that this particular interviewee made attempt of avoiding to provide direct responses over the related topic of research. This may contribute in indicating that the topic holds huge sensitivity for him as he may show willingness for avoiding the provision of any specific answer that contribute in harming the bank (Heffernan 2003). Suggestion can be provided that if this particular bank will be representing itself as a bank of Islam.

Hence, it can be added that certain specifications or features for ISLAM as an Islamic nation cannot be considered as being a part of present issues (Hitchins 2005). However, it has been suggested by findings, somewhat in a surprising manner, preparers of accounts in ISLAM do not tend to be considering the society of ISLAM for being amongst the key groups of user regarding the reporting of finance. Out of the questionnaires conducted, two respondents of questionnaire contributed in stating that the society of ISLAM hold the representation of these key users. As a significant example, one of the participants held the opinion that there had been no issue related to religious consideration, at minimum from the perception that would be creating conflicts between the Islamic Law and AAOIFI (Hoarau 2005).

In addition to what has been stated above, another significant issue took place within this particular study had been that, as a matter of fact in a surprising manner, even though there had been involvement of interest within the transaction of listed organizations in ISLAM, a number of users do not hold the knowledge towards the limit at which they had been involved, or can indeed be completely unaware regarding the existence, as each and every interview from the sector of banking contributed in mentioning that disclosures had been made regarding the rate of interest within the differences of names in the category of special commission (Karim 2009). It had been indicated by the interviewees that the trends within the term to special commission from interest is due to the fact that nation of Islam pay more attention towards the term interest. The current study contributes in suggesting that the degree of agreement with respect to the support of respondents for adoption of AAOIFI, however, does not contribute in reflecting a perception that all accounting standards of AAOIFI hold the suitability for the environment of ISLAM.

However, there is instead its existence as it had been feeling of respondents that felt the needs of users, and the principles in Islamic systems, do not seem to be having higher influence and impact over IASs in the current consideration. It has been mentioned by some of the interviews that certain specifications or features for ISLAM as an Islamic nation cannot be considered as being a part of present issues (Hussein 2004). This contributed in suggesting that these specific banks make attempts of hiding the fact that there is dealing with the interest from majority of the individuals, their actions contribute in showing that there are differences in the form and in the substance as well.

These key users had been a listed company, and the other one was a bank. It can be suggested that even though the organizations of ISLAM make attempts to follow the requirements of sharia, there might still be involvement of conflict due to ignorance towards the interest of society and then, the practice in accordance with the framework of accountability is restricted. In addition to this, the findings contribute in suggesting that the organizations of ISLAM made an addition of DZIT as being one of the key users as these contribute in recognizing them as the key group (Ainley 2007).

It has been found by certain researchers that there is existence of positive relationships amongst nations where English is considered as the key language and the AAOIFI being adopted. It can be argued that nations where culture of Anglo- America is present, considering that the adoption of AAOIFI is easy. This is mainly due to the fact that the key language of the IASB is considered as English (Karim 2009). In the ISLAM, the language that is considered official is Arabic. However, since the year 2008, an official translation in Arabic has been done in the available AAOIFI.

With respect to these findings, it has been noted that most of the interviewees did not tend to be mentioning the issues of language as a significant problem, and only some participants of questionnaire agreed to the fact that the language is a problem. However, it is also important to add that the analysis of finance may consist of additional information from the authority of capital market along with the financial reports of organizations. This authority contributed in assisting the analysts of finance in order to obtain information important in order to make the decisions of investment (Moore 2007). This is perhaps due to the fact that they hold the belief that will assist in improving and developing the stock market of ISLAM. This also contributes in giving rise to a significant need as there was unwillingness or inability for protection of interests in the society.

It is obvious from the findings related to the study that small listed organizations and local offices have still been suffering from the issues of language. This is specifically due to the fact that they do not tend to be having appropriate resources (Hussein 2004). In addition to this, previous literature contributes in suggesting that the terminology of accounting being translated that includes the AAOIFI has to be considered as being highly problematic.

There are chances that this is specifically the case translations in Arabic, as Arabic is less in close relation with the language of English, in comparison with other languages such as German and French (IASC 1989). Therefore, there is possibility that a particular translation in Arabic may not be applied or understood in an equivalent manner. Further ahead, it is important to state that the translations in Arabic are note considerable updates on frequent basis.

In addition to this, the issue of language can be seen in ISLAM to a higher limit in comparison with the other nations due to the weaknesses of body of regulation to deal with the demands held by the local users or offices who may not be showing sufficient familiarity with the accounting standards of AAOIFI. In addition to this, Certain interviewees stated the ignorance of certain companies in ISLAM related to the role played by society is a backlog point. There is lack of priority amongst the organizations of ISLAM (Karim 2007). This also contributes in giving rise to a significant need as there was unwillingness or inability for protection of interests in the society.

Based on these sections of the chapter, it can be concluded that the implementation of AAOIFI in ISLAM will contribute in creating certain costs and issues. These will be including an absence of appropriate knowledge that may provide assistance to the accountant of ISLAM for application of professional judgment, issues related to fair value, alternate methods in certain standards, scope of holding a comparison with previous statement of finance, costs of training, the need for adapting the systems of IT and services of consultancy. All of these issues will take place from adopting the AAOIFI in ISLAM (Karim 2009). However, suggestion has been provided that hold comparison with other Gulf nations, there are significant weaknesses within the training and education of AAOIFI.

Thus, it can be concluded that majority of the respondents within this particular study contribute in providing certain suggestions for overcoming these particular issues. In addition to this, it has been mentioned by some interviewees that these firms show preferences for dealing with the similar standards within a number of different nation so that the training being provided to the staff member may be considered as being the same. This helps in ensuring that these employees can make movement towards a number of different nations without the encounter of any specific issues that arise from a number of different variations within the standards of accounting.

Previously conducted studies have contributed in indicating that firms of international audit are known to be significant channels with respect to the developed nations for transferring their technology of accounting to, and influencing the practices of accounting regarding the developed nations. As stated in the previous section of this chapter, all organizations of ISLAM should be disclosing each and every information that helps in serving accounting needs of the users (Moore 2007). However, the particular study contributes in suggesting that although the recognition has been done as key users by the preparers of accounts, majority of the primary users in ISLAM, like the ones representing the private sector, end up suffering from the lack of transparency and disclosure, on the element of organizations over the stock market of ISLAM.

Conclusion

For achieving the main objectives in this research, pragmatic approach was applied. The process helped the researchers to apply research based on quantitative and qualitative design. A method of quantitative ability was used for providing a general picture of the problems that surround the adoption of AAOIFI in ISLAM. Additionally, interpretive approaches use with qualitative processes helped in following the investigation in this research in a detailed manner and have helped in reaching a common conclusion from the main findings. The study findings helps in contributing to enhanced factors of comprehensiveness impacting the AAOIFI adoption in ISLAM along with assessment of the AAOIFI extent needed for ISLAM requirements (Heffernan 2003).

The main findings of this research helped in revealing that the accounting standards developers in ISLAM have indicated that reports with financial data have to be developed for investors, analysts, collaborative creditors and the government agencies. These groups were considered to depict the most crucial groups but were mostly not inclusive amongst the ISLAM societies. Such findings were attributed to preparers of accounting with a weaker acknowledge of certain Sharia priorities. Therefore, Islamic accountability standards is often implemented by them in a weaker manner. Most interview results also depicted that society does not have accounting regulation standards accurately implemented and did not protect the ISLAM best interests or the better goods (Mallat 2008). Even though preparers of accounting acknowledge the important of groups with aforementioned nature as the premium financial reports user groups, the suggested findings depicted that there were some user groups as participants were completely satisfied with the present disclosure levels and were also transparent. This can influence the accounting user’s ability for making decisions suggesting that ISLAM listed companies related financial reporting currently might have limitations of achieving the main organizational objectives which lies in usefulness of decisions as organized before by several accounting bodies internally and externally to ISLAM. The result can help in depicting that preparers of accounting have a tendency of avoiding enhanced disclosure for their individual self-interest which has the ability of explaining why such an enormous effort is made by them for lobbying the regulation of accounting in ISLAM (Heffernan 2003). Users of accounting have been of the suggestion that preparers of accounting provide disclosure that was not sufficient to rouse purposes of religion such as data that helps to calculate the Zakat amount. Even though most of the users have not found satisfaction with the present disclosure level but still the reports have indicated that they are satisfied with the prepared finance reports for AAOIFI in comparison to those prepared in accordance to International accounting standards. The depicted findings displayed that there was a complete AAOIFI adoption when analyzing the complete consensus in ISLAM current as they also have considerably various benefits on International According standards in ISLAM. The findings, however also depicted to suggest that certain respondents are of the notion that not every AAOIFI are suitable for the environment of ISLAM. It has further been appeared that the complete findings that most participants have agreed upon should adopt AAOIFI which has a benefit for ISLAM (Hussein 2004). This was agreed by participants that reporting related to finances helps in improving with respect to relevance, reliability, comparativeness and even understanding ability resulting in turn to increase the confidence of investors and investment in foreign environment.

The revelation from the findings were of the notion that motivation beneath AAOIFI adoption in ISLAM has mainly been due to economic adaptation to the increasing FDI effect with complete adoption which has been one of the economic objectives in the ISLAM. This indicated that even though the systems of accounting after ISLAM adopted AAOIFI has served the needs of accounting at the local level with respect to purposes of religion but still it would be of enhanced significance serving to invest and for purposes related to economical perspectives (Mallat 2008). Most of the mentioned participants also experienced the adoption of AAOIFI and these will be of enhanced importance for foreign parties, for example foreign direct investment and accounting firms internationally instead of the parties at the local level. The suggested findings confirmed that the factors of religion such as the Islamic factors help to shape the culture of ISLAM with limited effect over systems of accounting because it has been indicated by the results that involvement of interest in certain transactions done by various companies present in the stock market of ISLAM. Even though, however there are some efforts been made through certain AAOIFI settlers for following the principles of Sharia. From these findings, it can be depicted that the current accounting standards with respect to Zakat does not help to provide appropriate data for calculating Zakat. This leads towards most federations to make use of finance reports related to companies (Hitchins 2005). Therefore, this implies that with specific listed company’s efforts reflecting the principles of Sharia, there still is inappropriateness with respect to operation in the framework of Islamic accountability. As a consequence, the users of Islamic accounting do not have the ability of making completely informed decisiveness.

Furthermore, the findings presented that the range at which the law of Sharia is observed within the settings of accounting standards has a dependency on efforts done individually. It was further suggested in the results that factors based on economy are over-ridden by factors based on religion and culture in accounting systems of ISLAM. In addition to this, the settings of accounting standards had political nature dominance indicating that those regulating and preparing gain additional power for protecting the interest by the systems of accounting rather than the users of accounting.

The suggestion of the results was also that the accounting practices deficiencies reflect the environment and culture of ISLAM locally which is a further product of weak process enforcement along with the western culture influence on culture and regulations in ISLAM. Henceforth, the AAOIFI can have an adoption in ISLAM currently as well (Moore 2007). This will help in showing that this application will be a support to achieve specific purposes of religion such as enhanced disclosure and using just values that can have enhanced appropriateness related to cost for calculating Zakat.

A significant issue of culture can develop by AAOIFI adoption such as from language English to Arabian. This helped in indicating that this can cause an issue for ISLAM small listed organizations over the stock market and can also cause challenge for firms of accounting at the local level because they already have resource limitation that will not let them overcome this challenge (FASB, 1998). The issue can also be explained through the fact that there exists weakly enforced laws in the system which not always have to be helped for companies whenever they are in need of any help and support. Additionally, the participants had a concern over the gap present between standards (updated) and the translational correspondence. Additionally, even though AAOIFI Arabic version has an availability on the website of Islamic accounting standards, but still there is an issue of translating and understanding for all the citizens in the region of Arab (Mallat 2008).

Certain participants also responded that ISLAM will provide representation of other issue of culture but the results from the interview depicted that this was not a main problem. This problem was mentioned through respondents with work related experience in the Islamic accounting standards settings which can advise that attempt has been made for keeping the measures to get lost in the societal standards. Another problem of culture as evident from the response of participants were the illiteracy of accounting standards in the society of ISLAM. Certain participants have a relation to the problem of lacking enough standards of accounting within United Arab Standards (Moore 2007). This also suggested as evident from the findings is that there is AAOIFI knowledge limitation on the side of ISLAM accountants that can be attributed to the inefficient education and gained training. Certain responses from respondents also suggested that even with present sessions of training related to AAOIFI, the amount of training sessions and their appropriateness is still not adequate. Some respondents further depicted that the session organizers have impacted the setters of accounting who have a specific preference that Islamic accounting standards will be led continuously in ISLAM instead of other standards of accounting such as International financial accounting standards (Hussein 2004). Those respondents who were in agreement that the sessions of training will aim specifically to support Islamic accounting standards use and presenting the benefits of Islamic standards on international financial related standards. This implied that certain evidence can be organized of trying to impact the session’s content and leading to offer evidences in order to ensure that the attempt of groups are for lobbying the ISLAM based accounting standards. This implied that a doubt can be raised with regard to advantages of current session’s content on enhancing knowledge related to International finance related accounting standards (FASB, 1998). This also led towards illustrating that the materials dearth related to International finance related accounting standard in ISLAM had a contribution to enhance the issues. This also led towards suggesting that accounting staff required to be trained at the major expenditure of several companies listed on the stock market being incurred, even though this will be a manner by which several other companies listed can enhance their International accounting standards related knowledge. Additionally, this suggested that the findings had substitutive International standard methods presenting an issue as there also exist certain standards allowing fair value use or costs related to historical facts (Archer 2005). It was also suggested by the interviewees that this can influence the makers of important decisions, in turn effecting decision making capacity of the user. Some participants in this research however also provided suggestions that a substitute method can be of benefits for ISLAM as it can be made possible to make a choice amongst the available processes for the environment of ISLAM along with achieving time in harmonization of accounting (Mallat 2008). An example here can be of ISLAM only an individual method named, weighted average, is used to allow measurement of inventory cost in turn resulting in this method being used in standardized choices. In addition, some participants have the thought process that this is an option for ISLAM for addressing certain specific needs of accounting for Islamic standards of accounting being amongst the standard alternative methods (Hussein 2004). It was mentioned further by some interviewees that this is the option for ISLAM if it wants to address specific requirements of accounting for AAOIFI. Some also mentioned that substitute methods can be applicable for the responses of Islamic standards to lobby politically across several nations. It also appeared from the findings that a specific broad issue lies in enforcement process weakness as present capacity cannot have a sufficiency for enforcing the AAOIFI. This therefore will call for the issue related to understanding AAOIFI benefit when implementing the procedures as they might impact the decision making of investors (Archer 2005). Some responders are also of the thought that current level inadequacy related to disclosure and simultaneous disadvantages within bodies related to enforcement helping in reducing the user’s ability in making the correct decisions to a considerable range. Some respondents also indicated that International accounting standards are insufficient precisely fixed with the inadequate qualified members suitability with considerable free will for being devoted to the requirements of International accountant standards. Additionally, every part time worker and member are not frequently meeting each other resulting in insufficient time for dealing with the standards of accounting and related current updates. Additionally, this authority also takes more time than needed for dealing with and answering most doubts regarding International standards. Henceforth, the AAOIFI implementation effectiveness is ISLAM cannot be questioned (Hitchins 2005). The results further suggested that other prices such as change in systems of software and services of consultation can be incurred through the companies listed on ISLAM stock market as they will require systematic adjustment compatible with modern requirements of disclosure. This was mainly the problem that CFO organizations suggested their issue regarding evidence being offered on the way in which CFOs have attempted at weighing the costs and changeover benefits for AAOIFI (Moore 2007). Further findings clearly depicted that attempts were made by the group for lobbying the accounting standards choices.

It has further been appeared that the complete findings that most participants have agreed upon should adopt AAOIFI which has a benefit for ISLAM. This was agreed by participants that reporting related to finances helps in improving with respect to relevance, reliability, comparativeness and even understanding ability resulting in turn to increase the confidence of investors and investment in foreign environment (Hussein 2004). Some respondents, however were in disagreement to adopt AAOIFI as they did not believe that financial reports will improvise quality of companies listed on the stock.

This also helped in suggesting that there are various benefits such as time saving and expenditure involvement to issue Islamic Accounting standards specifically given the current situation of International accounting standards application (Hussein 2004). It was also thought by the participants that IAS needs to stop the IAS issues which are not familiar with the investors in the foreign environment and they need to use the standards of AAOIFI framework which takes into consideration the financial reporting quality of several companies listed over the stock markets (Mallat 2008).

The suggestion related to findings is that a stronger regulation body is needed to adopt AAOIFI and it has also been suggested that an important role will be played here by SAMA in effectively implementing AAOIFI over institutes of finances. Certain interviews have also considered that adopting AAOIFI in ISLAM can contribute to provide certain data associated with the requirements of Sharia, such which is greatly disclose and prepared from figures in accordance to fair values that can be highly significant that the cost figures in Zakat calculations historically evident (Hussein 2004). Moreover, these participants also thought that usefulness of decisions has an influence through strongly lobbied regulators of accounting and preparation. Additionally, it is influenced through ISLAM user’s education levels and their inadequate knowledge related to AAOIFI. Henceforth, it is thought by them that even after AAOIFI is adopted in ISLAM, the objective can be questioned as well.

The main findings of this research helped in revealing that the accounting standards developers in ISLAM have indicated that reports with financial data have to be developed for investors, analysts, collaborative creditors and the government agencies.

The study findings helps in contributing to enhanced factors of comprehensiveness impacting the AAOIFI adoption in ISLAM along with assessment of the AAOIFI extent needed for ISLAM requirements (Moore 2007). The contribution of this result can be to factors comprehension that influences on the ISLAM accounting systems and the range at which these systems are appropriate for requirements of users at the local level through sufficient information offering. Furthermore, the findings will make a difference to issue related awareness that can developed when countries that are developing start to make AAOIFI transition along with understanding the related issues and how these can be resolved. The main reason of this can also be in accordance to the findings within the study material dearth over AAOIFI. Therefore, this study will contribute towards literature by presenting AAOIFI standards adoption in ISLAM (FASB, 1998). Further contribution of the study also lies in the evident provision in the manner by which preparers of accounting attempt to defend individual conflicting interests through selective standards of accounting being lobbied by using costs and comparison related benefits. Suggestions have been offered in this study for concerned organizations with the financial standards reports dissemination in developing nations. This also helps in presenting the elements evidence in influencing the AAOIFI suitability and therefore can serve as an interested regulators to enhance the accounting standards suitability in several nations along with concerned researchers on the perspective of AAOIFI adoption (Archer 2005). It can also further be recommended that regulation, supervision and authorities monitoring within the domain of businesses has to be possessed by capabilities adequately along with resources appropriately for meeting the responsibilities and roles.

The revelation from the findings were of the notion that motivation beneath AAOIFI adoption in ISLAM has mainly been due to economic adaptation to the increasing FDI effect with complete adoption which has been one of the economic objectives in the ISLAM (Hitchins 2005). This indicated that even though the systems of accounting after ISLAM adopted AAOIFI has served the needs of accounting at the local level with respect to purposes of religion but still it would be of enhanced significance serving to invest and for purposes related to economical perspectives (Moore 2007). The depicted findings displayed that there was a complete AAOIFI adoption when analyzing the complete consensus in ISLAM current as they also have considerably various benefits on International According standards in ISLAM. The findings, however also depicted to suggest that certain respondents are of the notion that not every AAOIFI are suitable for the environment of ISLAM.

It has further been appeared that the complete findings that most participants have agreed upon should adopt AAOIFI which has a benefit for ISLAM (Karim 2007). This was agreed by participants that reporting related to finances helps in improving with respect to relevance, reliability, comparativeness and even understanding ability resulting in turn to increase the confidence of investors and investment in foreign environment. Some also mentioned that substitute methods can be applicable for the responses of Islamic standards to lobby politically across several nations. It also appeared from the findings that a specific broad issue lies in enforcement process weakness as present capacity cannot have a sufficiency for enforcing the AAOIFI. This therefore will call for the issue related to understanding AAOIFI benefit when implementing the procedures as they might impact the decision making of investors. This is not in context with the social reasons but due to the fact that DZIT holds more authority and power in comparison with the other groups (Al-Deehani 2006). It has been argued by certain previous studies that a number of developing nations have recently been making attempts for attraction of foreign investment and therefore, there is no scope of setting the accounting standards that even though may hold the suitability for the requirements of the nation as well. This particular study contributed in implying that there are issues of Shariah when there is application of IAS and IFRS by practitioners in order to record the financial transactions of Islam. Therefore, it can be stated that there is an urgent need for addressing technical aspects different and unique to the financial transactions of Islam by the standard setters and regulators. This in general would be a major contribution in order to ensure the compliance of IAS to Shariah, and at the same point of time, attempt will be made for minimizing the practices that are highly diverging. This may result in hindering the present effort of harmonization made by IASB and MASB. Further ahead, there is a significant need for collaboration amongst the regulator, standard setter and academicians in the provision of applicable technical guidance in order to report on financial transactions of Islam that contribute in supporting IAS along with the precepts of Shariah.

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