Introduction: The Basics of Islamic Economics and Finance

The teachings of Islam encompass the essence of economic well-being and the development of Muslims at the individual, family, society and state levels. In order to appreciate the Islamic concepts of banking and finance, it is essential to place them within the context of the beliefs and philosophy underlying Islam. Therefore, this chapter provides the context for the study of accounting and financial accounting in Islamic finance and its financial institutions. The chapter addresses key issues that underpin the context of this book, which lay down the foundations for the important topics I cover in this study. The key aspects that I highlight here cover the philosophy of Islamic economics and finance, the evolution and development of Islamic law and jurisprudence, Shariah code of conduct and Shariah guidance and governance. Islam provides a comprehensive code and approach to life, and Islamic teachings reach beyond many views of worship and spirituality. An important element of Islamic thought describes the relationship between the created and the Creator with respect to wealth. As a fundamental principle, Islam encourages humans to embrace a role of stewardship for the earth and its bounty. The other fundamental principle is necessarily ethical in relation to behaviour and conduct and reaches deeply into commerce and economics (Alamad 2017b). This chapter provides the context for the study of accounting and financial accounting in Islamic finance and its financial institutions. The chapter addresses key issues that underpin the context of this book, which lay down the foundations for the key subjects I cover in this study. The important aspects that I highlight here in this chapter cover the philosophy of Islamic economics and finance, the evolution and development of Islamic law and jurisprudence, the Shariah code of conduct and Shariah guidance and governance.