Iranian Journal of Accounting, Auditing and Finance in the Islamic Environment

Iranian Journal of Accounting, Auditing and Finance in the Islamic Environment

Feasibility of Establishing Congruence in Islamic Financial Reporting with International Financial Reporting Standards

Document Type : review paper

Authors
1 Department of Accounting, North Tehran Branch, Islamic Azad University, Tehran, Iran
2 PhD student of Accounting, North Tehran Branch, Islamic Azad University,Tehran, Iran
10.22034/aafie.2024.444483.1039
Abstract
Islamic financing is growing rapidly in the world, the proper performance of Islamic finance in financial crises has led to increasing attention to this method of managing financial assets, and the assets managed by Islamic finance grew from 1 trillion dollars in 2011 to 3.4 trillion dollars in 2020. This has caused many international financial institutions, even non-Islamic financial institutions, to operate 'windows' offering Islamic financial services in order to benefit from the lucrative Islamic financial market. In this situation, there are differences between Islamic accounting and conventional accounting that create differences in identification, disclosure and reporting of transactions provided by the Islamic financial system from conventional financial systems that leads reduction of the comparability of financial reports. Considering the broad use and acceptance of international financial reporting standards, it is necessary to create congruence between Islamic and conventional financial reporting. In this article, issues relating to Islamic reporting that have caused the difference between Islamic financial reports and conventional ones (time value of money, substance over form, accounts based on mudarabah, Ijara Bitamleek and sukuk) were examined and the possible congruence between these reports was argued. The results of the investigations shows that in the most issues, it is possibe to make congruity between two types of reporting systems and the forming of joint working groups between IASB and AAOIFI and conducting further research on controversial issues (especially accounts based on mudarabah) can solve the problem of incongruity between them.
Keywords

Volume 2, Issue 5
Spring 2025
Pages 132-155

  • Receive Date 18 February 2024
  • Revise Date 11 March 2024
  • Accept Date 02 June 2024
  • Publish Date 22 May 2025