Islamic accounting, accountability and governance

Islam is the world's second-largest religion, and accountability (to God and to fellow humans) lies at its heart. Islamic principles and rules of conduct, constituting the Shariah, restrict the actions of Muslims, in particular forbidding the payment and receipt of interest. Since the 1970s, an Islamic financial industry has emerged to provide Shariah-compliant transactions and financial structures to devout Muslims. This has given rise to a need for specific accounting approaches for these transactions. Under Islam, organizations and members of society are considered to have wider accountability responsibilities, with social and environmental reporting a longstanding issue for Islamic organizations. To demonstrate compliance with Shariah, many organizations have established Shariah supervisory boards consisting of Shariah scholars familiar with commercial and financial transactions. This unique governance mechanism provides a model for more conventional entities that wish to enhance their accountability to society. Research into Islamic accounting, accountability and governance has grown substantially in recent years, but there are still potentially fruitful avenues for further research.