Dr. Alireza Ramrouz, a member of the Islamic Accounting and Auditing Committee of the Iranian Association of Islamic Finance said Zakat payment and prohibition of usury are among Islam's ways to establish economic justice. Islam in order to establish justice and equality as much as possible in the economic field, has prohibited interest, established methods and contracts for financing usury-free and facilitated Islamic economic affairs in societies.

The necessity of dealing with Islamic accounting

Unfortunately, IFRS’ international reporting standards, as the only set of global accounting standards applicable in more than 140 countries, do not address Islamic accounting guidelines and Islamic financial instruments. In addition, none of the members of the Standards Committee are Muslims or experts in Islamic law and finance.

These kind of institutions have taken two main and different approaches to solve the challenges of Islamic accounting.

According to the first approach, it is necessary to compile a separate set of Islamic accounting standards. The Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) as the flagship of this view has so far compiled 16 financial accounting standards.

According to the second view, the existence of a separate set of Islamic accounting standards provides the basis for fraud and arbitrage opportunities. The proponents of this view that Malaysia is their pioneer seek to work with the International Accounting Standards Board (IASB) to incorporate Islamic accounting guidelines into international financial reporting standards. This view has not yet achieved a tangible result in practice.

The necessity for executive action in the field of Islamic accounting

It seems necessary to check the accounting standards and procedures in terms of Sharia. In particular, it would be meaningless to provide guidance on Islamic accounting without a jurisprudential review and the opinion of experts in this field. Therefore, the formation of a sharia committee in the field of Islamic accounting by the Securities and Exchange Organization as an up-to-date and leading organization that has already taken a necessary step to establish Sharia Committee, which is essential and appropriate.

The possible duties and jurisdiction of the Sharia Committee of Islamic Accounting are as follows:

1. Examining jurisprudential doubts about the existing theoretical framework and accounting guidelines and providing appropriate solutions

2. Identifying new issues and compiling accounting guidelines from Sharia perspective

3. Cooperating with similar institutions in other domestic and foreign organizations

4. Cooperating to develop and expand educational programs and scientific publications in the field of Islamic accounting

5. Cooperating to hold international meetings in the field of Islamic accounting

He went on to introduce some of the challenges of accounting for Islamic transactions, saying some of the challenges of accounting for Islamic transactions are:

1. Choosing one of the two approaches at the international level to provide Islamic accounting guidelines (cooperating with the International Accounting Standards Board or compiling a separate set of Islamic accounting standards) or adopting a third approach

2. Explaining the jurisprudential principles of Islamic accounting

3. Reviewing standards compiled by the Accounting and Auditing Organization of Islamic Financial Institutions from both jurisprudential and accounting perspectives