An Islamic perspective on the true and fair view override principle

Purpose – This paper aims to determine whether the “true and fair view override” (TFVO) principle is relevant and applicable in Islamic accounting. In addition, the paper examines the roles that TFVO could play in Islamic accounting and auditing. Design/methodology/approach – A qualitative resear...

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Main Authors: Salihin, Abang, Abdul Hamid, Fatima, Abdulrahman Anam, Ousama
Format: Article
Language:English
English
Published: Emerald Group Publishing Limited 2014
Subjects:
Online Access:http://irep.iium.edu.my/41514/1/JIABR_2014.pdf
http://irep.iium.edu.my/41514/4/41514_An%20Islamic%20perspective%20on%20the%20true%20and%20fair%20view%20override%20principle_scopus.pdf
http://irep.iium.edu.my/41514/
http://dx.doi.org/10.1108/JIABR-12-2011-0005
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Institution: Universiti Islam Antarabangsa Malaysia
Language: English
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spelling my.iium.irep.415142017-09-06T03:51:35Z http://irep.iium.edu.my/41514/ An Islamic perspective on the true and fair view override principle Salihin, Abang Abdul Hamid, Fatima Abdulrahman Anam, Ousama HF5601 Accounting. Bookkeeping Purpose – This paper aims to determine whether the “true and fair view override” (TFVO) principle is relevant and applicable in Islamic accounting. In addition, the paper examines the roles that TFVO could play in Islamic accounting and auditing. Design/methodology/approach – A qualitative research method was used based on documentary and textual analysis of the Shari’ah fundamentals (Islamic legal sources) and relevant accounting standards and regulations. Findings – The paper found that the TFVO is relevant and applicable in Islamic accounting and auditing and not contradictory to the rules of the Shari’ah. Therefore, the concept is acceptable for use in Islamic accounting. Moreover, based on the several roles played by the TFVO, in the Islamic context, the practicality of this concept in Islamic accounting provides further justification for its continued usage. Practical implications – The findings of the paper provide a basis to support the inclusion of theTFVO in Islamic accounting standards, as well as possible usage by Islamic financial institutions (IFIs). Thus, regulators of IFIs and Islamic accounting standards setting bodies can consider it in their challenging task of standardizing accounting practices due to the different interpretations of transactions from the various Madhahib and multiple accounting concepts and practices. In addition, the discussion in the paper reminds accountants and auditors of IFIs and Islamic organizations that providing a true and fair view (TFV) is paramount; thus an override of inapplicable accounting standards and regulation is allowed, but not Shari’ah. Thus, TFVO can assist accountants to record transactions that reflect the economic reality of the IFIs, especially prior to accounting regulations keeping pace with the rapid business environment. Originality/value – The paper has highlighted a very important issue relating to the TFV, specifically the TFVO, from the Islamic perspective. The paper is considered as the first paper that contextually analyses this issue based on Islamic legal sources using a qualitative approach. In addition, the paper has contributed to the literature in Islamic accounting and auditing. Emerald Group Publishing Limited 2014-09-02 Article REM application/pdf en http://irep.iium.edu.my/41514/1/JIABR_2014.pdf application/pdf en http://irep.iium.edu.my/41514/4/41514_An%20Islamic%20perspective%20on%20the%20true%20and%20fair%20view%20override%20principle_scopus.pdf Salihin, Abang and Abdul Hamid, Fatima and Abdulrahman Anam, Ousama (2014) An Islamic perspective on the true and fair view override principle. Journal of Islamic Accounting and Business Research, 5 (2). pp. 142-157. ISSN 1759-0817 http://dx.doi.org/10.1108/JIABR-12-2011-0005
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
topic HF5601 Accounting. Bookkeeping
spellingShingle HF5601 Accounting. Bookkeeping
Salihin, Abang
Abdul Hamid, Fatima
Abdulrahman Anam, Ousama
An Islamic perspective on the true and fair view override principle
description Purpose – This paper aims to determine whether the “true and fair view override” (TFVO) principle is relevant and applicable in Islamic accounting. In addition, the paper examines the roles that TFVO could play in Islamic accounting and auditing. Design/methodology/approach – A qualitative research method was used based on documentary and textual analysis of the Shari’ah fundamentals (Islamic legal sources) and relevant accounting standards and regulations. Findings – The paper found that the TFVO is relevant and applicable in Islamic accounting and auditing and not contradictory to the rules of the Shari’ah. Therefore, the concept is acceptable for use in Islamic accounting. Moreover, based on the several roles played by the TFVO, in the Islamic context, the practicality of this concept in Islamic accounting provides further justification for its continued usage. Practical implications – The findings of the paper provide a basis to support the inclusion of theTFVO in Islamic accounting standards, as well as possible usage by Islamic financial institutions (IFIs). Thus, regulators of IFIs and Islamic accounting standards setting bodies can consider it in their challenging task of standardizing accounting practices due to the different interpretations of transactions from the various Madhahib and multiple accounting concepts and practices. In addition, the discussion in the paper reminds accountants and auditors of IFIs and Islamic organizations that providing a true and fair view (TFV) is paramount; thus an override of inapplicable accounting standards and regulation is allowed, but not Shari’ah. Thus, TFVO can assist accountants to record transactions that reflect the economic reality of the IFIs, especially prior to accounting regulations keeping pace with the rapid business environment. Originality/value – The paper has highlighted a very important issue relating to the TFV, specifically the TFVO, from the Islamic perspective. The paper is considered as the first paper that contextually analyses this issue based on Islamic legal sources using a qualitative approach. In addition, the paper has contributed to the literature in Islamic accounting and auditing.
format Article
author Salihin, Abang
Abdul Hamid, Fatima
Abdulrahman Anam, Ousama
author_facet Salihin, Abang
Abdul Hamid, Fatima
Abdulrahman Anam, Ousama
author_sort Salihin, Abang
title An Islamic perspective on the true and fair view override principle
title_short An Islamic perspective on the true and fair view override principle
title_full An Islamic perspective on the true and fair view override principle
title_fullStr An Islamic perspective on the true and fair view override principle
title_full_unstemmed An Islamic perspective on the true and fair view override principle
title_sort islamic perspective on the true and fair view override principle
publisher Emerald Group Publishing Limited
publishDate 2014
url http://irep.iium.edu.my/41514/1/JIABR_2014.pdf
http://irep.iium.edu.my/41514/4/41514_An%20Islamic%20perspective%20on%20the%20true%20and%20fair%20view%20override%20principle_scopus.pdf
http://irep.iium.edu.my/41514/
http://dx.doi.org/10.1108/JIABR-12-2011-0005
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