The Convergence of the Divine and the Debit: A Comprehensive Analysis of the Interplay Between Islamic Fiqh and Modern Accounting Standards (2018–2025)

Abstract

Objective: This study investigates the epistemological and technical convergence between Islamic jurisprudence (Fiqh al-Muamalat) and modern accounting frameworks (IFRS and AAOIFI) from 2018 to 2025. Method: Adopting a qualitative systematic literature review (SLR), the research synthesizes data from academic journals, regulatory standards (FAS 30, 39, 44), and industry reports to analyze the reporting discrepancies in Islamic financial institutions. Findings: The analysis reveals a persistent "comparability paradox" where identical economic transactions are reported differently under IFRS (substance over form) versus AAOIFI (form over substance). Key divergences are identified in the treatment of Murabaha (sale vs. loan), Mudarabah (equity vs. liability), and lease accounting. Furthermore, the study highlights the emergence of new regulatory frontiers, including the standardization of Zakat calculation and the accounting for digital assets. Implications: The study concludes that while harmonization efforts are accelerating, distinct ontological roots necessitate a dual-reporting approach in many jurisdictions to satisfy both global investors and Shariah compliance requirements.