Developing Accountancy Thought
In The Islamic Civilization
Researcher / Samer
Kantakji, Ph.D.
Civilization is the most sublime thing which the nations have achieved
in their doctrines and aspects of their mental and intellectual activities
regarding building, sciences, knowledge, art and others. They could elevate
them in their life course to agree with it and its various capacities.
Moslems have set up their
civilization depending on Islam and Arabic language that included all
civilization aims. They made use of other countries' civilizations and acquired
a lot of those countries' sciences. The Islamic civilization is distinguished
with integrity and comprehensiveness. It included:
·
Rule and administration system that included
caliphate, ministry, judiciary, injustice, price control, police, terrorism,
rulers, post, accountants' council (Dewan), and
military aspects.
·
Sciences and arts with all their kinds: religion,
linguistics, sociology, natural sciences, mathematics, astronomy, medicine
pharmacology and translation.
·
Building and arts such as architecture, decoration
and artificial sciences.
·
Economics situations as agriculture, industry,
trade and money.
Thus, the role of money in this
civilization was quoted from the concept of Islam to have a function. Islam
took care of money role and clarified it as important as a basic need such as
(hunger, fear) to most people. God says: (Bakkara:
155-Be sure We shall test you with something of
fear and hunger, some loss in goods or lives or the fruits (of your toil), but
give glad tidings to those who patiently persevere).
Islam, also, specified this
importance and showed the necessity of not using it wrongly (getting money
without a right, the bribery) as God says: (Bakkara:188-And do not
eat up your property among yourselves for vanities, nor use it as bait for the
judges, with intent that ye may eat up wrongfully and knowingly a little of
(other) people's property). God emphasized that misusers of money are equal to dealers with interest
(getting money without a right); they are on the wrong side of war. Repentance
is to leave interest and satisfy with the capital to achieve justice (Bakkara: 279-If ye do it not, take notice of
war from Allah and His Messenger: but if ye turn back, ye shall have your
capital sums; deal not unjustly, and ye shall not be dealt with unjustly).
However, accountancy terms began
crystallizing; the first and most important is the capital and the way of
circulating it among people. But, Islam has not given the rein to money but
restricted it to a social role as God says: (Bakkara:
280-If the debtor is in a difficulty, grant him time till it is easy for
him to repay. But if ye remit it by way of charity that is
best for you if ye only knew). God shows the politeness of the religion and the
social dimension of money role He has added an unfamiliar concept that is
almsgiving and distinguished it with easiness. So, the term
"almsgiving" is equivalent in form to "dead debts" but
exceeds it in meaning and goal. Money alone has no social role without being
with God's jurisprudence (Bakkara: 63-And (moreover) He hath put
affection between their hearts: not if thou hadst
spent all that is in the earth, couldst thou have produced that affection, but
Allah hath done it: for He is Exalted in might, Wise).
After that the text of recording
and borrowing came immediately after it, which is the longest in Quran where God says: (282-O ye who
believe! When ye deal with each other, in transactions involving future
obligations in a fixed period of time, reduce them to writing let a scribe
write down faithfully as between the parties; let not the scribe refuse to
write: as Allah has taught him, so let him write. Let him who incurs the
liability dictate, but let him fear his Lord Allah, and not diminish aught of
what he owes. If the party liable is mentally deficient, or weak or unable
himself to dictate, let his guardian dictate faithfully. And get two witnesses,
out of your own men, and if there are not two men, then a man and two women,
such as ye choose, for witnesses, so that if one of them errs, the other can
remind her. The witnesses should not refuse when they are called on (for
evidence). Disdain not to reduce to writing (your contract) for a future
period, whether it be small or big: it is juster in
the sight of Allah, more suitable as evidence, and more convenient to prevent
doubts among yourselves but if it be a transaction which ye carry out on the
spot among yourselves there is no blame on you if ye reduce it not to writing. But take witnesses whenever ye make a commercial contract; and let
neither scribe nor witness suffer harm. If ye do (such
harm), it would be wickedness in you. So fear Allah; for it is Allah
that teaches you. And Allah is well acquainted with all things). The text has showed the wide
bases of accountancy origins where God shows us the way of writing (let not the
scribe refuse to write: as Allah has taught him). Later, God emphasized this at the end of the
text by saying (So fear Allah; for it is Allah that teaches you). It is noted that the text
clarified the following accountancy terms: 'debt', 'debt quantity', 'debt',
'debt writer',' fair in writing', 'dictator', 'special cases', 'witnesses', ' writing
aim', 'exceptions' and 'neutrality'.
Islamic Sharea has had the priority in inventing financial systems
never used before but made it as a religions prescription duty ' worshipping'.
So, these systems are distinguished with a material and spiritual systems. Each
of these systems has its private mathematical style.
Alms (Zakah) has its specific places and
sheets. It has special banks to be used properly. So, Islamic accountancy was
used in the concept of specialization (specialization in income and
expenditure). Later, Sharea gave a developed
financial concept, not applied before; it is to settle the outcomes (material
and cash) and spend them in the place they are obtained from while the surplus
is transferred to (Money House) the safe. The outcomes were organized in cash
lists and material ones. They dealt with duality problem in alms realization
The system
of Mawareeth (legacy) brought a dynamic mathematical
style, which the whole humanity has not witnessed such a thing before. It
realized a distributive justice among people. It maintained the rights of each
person regarding his/her importance in the family. It, also, has broken down
the accumulation of wealth, big or small, (Nissa: 7-whether the property be small or large, a
determinate share) while keeping the private
ownership. So, a very accurate,
familial and social link is achieved.
As a
sequence, it could melt money in its social role so it gave money its important
right to gladden people not to overcome them. These systems and other ones will
be dealt with Longley later.
Islam,
since its dawn, has been interested in private and general rights and
maintained it strongly. Islamic established firmly a wall called the allowed
and ill-gotten. It obliges every member to get this knowledge to clarify the
separating limits. It was told about Omar (peace be
upon him) in (23A.H=645 A.D.) that while wandering in the markets he said:
"No one sells in our market except those who know, otherwise, he deals
with interest willy-nilly. Al-Gazali (505A.H-1127A.D)
specified a chapter about reviving religion success called chapter of (Science of Earning) in which
he mentioned that seeking Earning Science is a duty on every earning Moslem
because seeking knowledge is an obligation for every Moslem. However, seeking
knowledge is for the needed. The earner needs earning science. Al-Gazali exceeded this by describing the Moslem investor as
(no one attains economy rank unless he restricts in his earning to the way of
rightness).
The importance of accountancy
researches lies in supporting the accountancy knowledge to reach definitions
agreed on. Thus, clear concepts are determined having the general approval from
the surrounding society.
The researcher sees that Islamic Sharea has surrounded accountancy and founded a fertile
mind which people applied for 14centuries and more under similar titles as: Writing Money, Earning Science and others. It can not be perceived that a
state lasted more than ten centuries had issued sciences and knowledge in all
fields to the world while its sciences are being still taught in the biggest
and best Western universities. However, this state has forgotten to put or
develop accounting and economic systems of its own. It is unbelievable that a
store big or small can run without an accounting system .so, how we can imagine
that a state ruled the world more than ten centuries without economic or accounting
systems. Al-Nowayri (733 A.H=1355 A.D) had referred
to the first professional accountancy block in history .This block showed that
accountancy is limited to its policies and applying them. (The meeting was held
by a group of the seniors of this profession who started it since their
childhood till their elderly age. Some of them said that was new and
innovative. How can such things be restricted?
Then the importance of this
research lies in:
1. The
appearance of Islamic banks and financial establishments that attained a
remarkable success.
2. The
appearance of accountancy standards and auditing for the Islamic financial
establishments issued by accountancy and auditing board for Islamic financial
establishments. That proved the possibility of applying the Islamic accountancy
standards in the Islamic society.
3. Answering the
accusation of the West to the Moslem and Arabs in particular that are retarded
in economics and accountancy and have to submit to the standards and principles
which their professional establishments and associations specify
4. Collecting
the intellectual participants of the Moslem accountants scattered in the books
of jurisprudence and Islamic history.
The research aims at fixing the
Islamic accountancy thought scientifically according to the age technologies to
be a reference for businessmen, accountants, the interested and every Moslem.
As the accountant is the weigher of gaining actions,
he decides the reserves, depreciation, and provisions. Besides, he prepares
the final accounts starting from the accountancy thought he has (Aaraf: 85-give just measure and weight), (Israa: 35-Give full measure when ye measure, and weigh
with a balance that is straight) and (Rahman: 8-In order that ye may not
transgress (due) balance). As a result he should not be biased to any partners, participants or
administration (Motafifin: 1-Woe to those that deal in fraud).
The research, on one hand,
neither aims at interpreting the current accountancy principles and concepts in
an Islamic style, nor seeks subjugating them by force. On the other hand, the
research will not interpret discretion of jurists and imams in an accountancy
style that agrees with the current theories and concepts. However, Islamic Sharea rules the ages not ruled by them.
As no accountancy theory has
gained the general approval up till now, comprehensiveness has a specific range
in the general accountancy tradition. Islamic society is similar to other ones
in its specialties, properties and principles.
The research, also, aims at
attaining the scientific rules of accountancy traditions and principles which
our scholars followed along the ages. The whole universe has witnessed for the
Islamic civilization because it helped in inventing most societies. However,
the Islamic society has its own view about accountancy. It needs data related
to it on which the accountants and beneficiaries act as to the financial and
accountancy data especially after the appearance and development of many
Islamic economic sectors such as Islamic banks, Islamic insurance companies,
Islamic financial houses and Islamic investment companies. Those need a
theoretical structure on which they rely the economic
and financial life within an Islamic legitimate method.
The research,
also, aims at re-correcting the accounting history and do justice to the
Arabs and Moslems by showing their participations and active role in this
science. Instead of mentioning the beginning of history of accountancy
since the Italian
Lucas Bashilio, we have to remember Al-Kalkashandi, Al-Nowayri, Al-Gazali, Abu-Ja'afar
Al-Demashki, Al-Marodi, Al-Khuwarizmi and many other Moslem celebrities who
recorded accountancy intellectually and practically since nearly (900) A.D.
i.e. before Lucas Bashilio before (700) years at least. Al-Nowayri [(733) A.H.= (1355) A.D.] had written the first integral accounting
reference in the human history.
He said:" Some of my
colleagues have asked me to put a summary through which the accountant knows
how to account and which enlightens him how to report about gaining and taxing.
Thus, I presented this summary, in which I mentioned about writing industry as
little as a drop of sea water and as a few as its gems to answer his question
and realize his hopes. These are necessary for a
accountant to know its shape and duties. When I wrote down this industry, I
neither found a book about its art nor a translated chapter or a compiled
reference. I have not noticed a reference about it, not even listened to a
statement about it. No one uttered a word or had the rein of diction in order
to be my ideal and follow his method in excellence and be as useful as he is.
But, I found it closed and covered where each writer was satisfied with his
knowledge and limited to his understanding. When I reviewed the idea and
revised it, its doors were opened and disclosed. So, I mastered it after making
it soft. Later, the idea had the way of success and began writing what I put
and aligned what I classified. I derived the term "Dewan"
(accountants' council) and what kinds stem from it. Besides, I mentioned the
first "Dewan" was in Islam and its reason.
I reported what the accountant may need regarding accountancy and its cases,
and what general accepted rules and idiomatic laws settle down. I mentioned
what the accountant may report about gaining and taxing and what mathematic
cases end at and attribute what troubles arise to them - God willing."
The research, also, aims at
deducing the Islamic accountancy standards that enlighten the way of
accountants and Islamic businessmen and all earners away from the standards
subject to interest ties put for its owners' sake only. That helps in searching
and developing accountancy thought according to the Islamic Sharea
rules and laws; and according to the environment in which jobs need
accountancy. That leads to increasing the trust in data and financial lists'
users in the accountancy information issued by the establishment that follow
the Islamic accountancy thought.
Every society has its school of
thought where knowledge is obtained. The conduct of the society depends on its
concepts and principles. Accountancy science is one of the social ones
developed by means of practical exercise. Then, scientific founding movements
came to put a frame for the concepts, suppositions and principles. Scientific
and professional groups supervised them.
The researcher sees that Islamic Sharea has planned on the society level as a whole by
fixing:
A- Invariable
facts formulated the accountancy thought and rules morally and conductively.
These facts are acquired from Quran Sunna and consensus, for instance:
·
Writing and recording when dealing financially
whether small or big (Bakkara:282- Disdain not
to reduce to writing (your contract) for a future period, whether it be small
or big).
·
Witnessing when current selling
(Bakkara:282- And get two witnesses, out of your own men, and if there are not two
men, then a man and two women, such as ye choose, for witnesses, so that if one
of them errs, the other can remind her).
·
Real money ownership is to God and man is
responsible for that (Noor: 33- give them
such a deed if ye know any good in them; yea, give them something yourselves
out of the means which Allah has given to you).
·
The allowed and ill-gotten.
·
The necessity of learning (Younos: 5-It is He Who made the
sun to be a shining glory and the moon to be a light (of beauty), and measured
out stages for it; that ye might know the number of years and the count (of
time).
·
Recoding the just true value without decreasing
anything (Bakkara:282- Let him who incurs the liability dictate, but let him fear his Lord
Allah, and not diminish aught of what he owes).
·
I specified qualities for the outcoming
information:
1. Information
truth.
2. Comparison
ability (unification).
3. Accuracy and
approximation "overconcern" Al-Gazali.
·
Neutrality (Bakkara: 282-But take
witnesses whenever ye make a commercial contract; and let neither scribe nor witness
suffer harm. If ye do (such harm), it would be wickedness in you).
·
Revenue is subject to wining or losing justly.
·
Confessing profit when producing (Anaam:141-It is He Who produceth gardens, with trellises and without, and dates,
and tilth with produce of all kinds, and olives and
pomegranates, similar (in kind) and different (in variety): eat of their fruit
in their season, but render the dues that are proper on the day that the
harvest is gathered. But waste not by excess: for Allah loveth
not the wasters).
B- I allowed
elastic procedures accommodates with every time and place which I expressed the
discretions. These were reflected in the accountancy systems that dominated in
the Islamic state in the form of accountancy policies changeable according to
the discretions such as limiting the tyranny in using the right of Abi Hanafi in return for the
conductor in his money without limits.
Thus, the researcher seeks
showing the Islamic accountancy character to the Moslem society according to
Islamic Sharea by means of these approaches:
·
Historic approach aims at theoretical and practical exercising
of accountancy thought in the Islamic history and knowing it to prove the
degree of its maturity.
·
Interpreting approach aims at showing appropriateness range
of accountancy standards of the other societies to Islamic Sharea.