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Abstract
The professional ethics of accountants is an important issue directly relating to the integrity of
the profession and its ability to secure the public trust. The fraudulent activities in accounting
field indicate the failure of accounting education as the beginning stage of the practice. It is
perceived that those happen due to deficiency of moral values inserted in the education level.
Inevitably, education system is alleged as the main cause of the problem. Accounting education
seeks for moral values to generate ethical accountants as part of society. Accordingly, the visi-
bility of ethics education in accounting programs may initiate the development of morality and
also increase public confidence in the profession. However, the efforts to integrate ethical val-
ues in educational system will not work well if there are no moral commitments implanted in
the individuals. Islam with its divine values plays the notable role to embed cognitive ethical
values. It emphasizes on the unity of God, the accountability to God and the concept of
maslahah (public benefits) to be the foundations of ethics. Incorporating Islamic ethics into the
system will be a significant contribution towards generating ethical accounting education. This
paper attempts to elucidate how the Islamic ethics contribute its role towards ethical
accountants as the products of accounting education.
1
Rochania Ayu Yunanda is Lecturer of Islamic Accounting Department, Sekolah Tinggi Ekonomi Islam Tazkia,Tel.:
0878 7071 0101, Email: andatazkia@yahoo.com.
2
Norakma bt. Abd. Majid is Academic fellow of Accounting and Finance Department, Universiti Malaysia
Terengganu
*)
We would like to take this opportunity to acknowledge my appreciation to everyone who has contributed in the
completion of this paper. We would like to convey our sincere gratitude and acknowledgement to our colleagues and
all the lecturers of Sekolah Tinggi Ekonomi Islam Tazkia and Universiti Malaysia Terengganu (UMT) who supported
and motivated us to write. We truly appreaciate ISEA and ICSEARD team who have given us a golden opportunity so
that our paper can be published.
R.A. Yunanda, N. Abd. Majid / Issues in Social and Environmental Accounting 1/2 (2011) 124-137 125
the existing code of conduct is failed to justice from injustice (Rahman, 2003).
develop the ethical awareness among the As contented by Irwin and Fry (2007),
practitioners. The finding significantly the ultimate object of ethics may con-
implied the need for a new version of cern on standards of conduct for person
comprehensive and ideal guidelines or groups, but the content of these stan-
which can guarantee it enforceability to dards is fundamentally shaped by the
guide the professional practices toward interactions. In short, code may high-
the ethical professional conduct. It can light the ethical concern, but what is re-
perhaps be concluded that a code of quired by accounting profession is moral
ethics is not the best way to improve character and ethical reasoning ability
ethical behavior (Carroll, 1998) unless it which is beyond the coverage in the
has been developed based on suitable ethical code of conduct. The concept of
policy and ethical code to prevent morality is defined by Irwin and Fry
unethical issue repeatedly arise. (2007) as a product of the way we think
about our contact and associations with
More importantly, it has been recog- other persons and groups and
nized that ethics and ethical behavior is (hopefully) the consideration of their
underpinned by moral reasoning view points. According to the authors,
(Jacking et al., 2007). Ethics goes be- ethics is defined as “the values and be-
yond the code; it is moral reasoning. The liefs we develop, define and clarify
most widely known work in the area of within the context of relationships both
moral reasoning is that of Kohlberg interpersonal (e.g. within families and
(1969), who developed the theory of friendships) and even more distant con-
cognitive moral reasoning and develop- nections (e.g. within professions, relig-
ment (Jacking et al., 2007). Kohlberg’s ion, cultural/ national identity, environ-
theory is concerned with how judgments ment), our expectations and acknowl-
are made and why one makes judgment. edged responsibilities in these, and our
In general, higher levels of moral rea- understanding of the consequences of
soning indicate higher level of ethical particular courses of action”. Thus, is-
practices. sues of ethic are inescapably involve a
discussion of values and belief without
On directly engaged to serve the public which ethical or moral positions could
through the professional judgement on not be legitimately evaluated and re-
matters related to audit, accounting, tax vised.
and consulting services , accountants
should realize their roles as moral
agents. They have to consider account- 2. Ethics and Religion
ing as an activity containing significant
moral dimensions. They are expected to The Role of Religion in Promoting
have a broader sight that the ethical code Ethics
should be more than just code. The code
provides a point of reference to address In view of the definition presented
the concerns of ethical conduct without above, the present paper takes a view
enforcement by itself. On the other side, that when developing a content of ethi-
ethics, clearly signal and distinguish cal code, it is necessary to adopt a differ-
right from wrong, good from bad, and ent perspective according to religious
128 R.A. Yunanda, N. Abd. Majid / Issues in Social and Environmental Accounting 1/2 (2011) 124-137
ogy, but also a way of life. counting system mainly happen due to
the dichotomy between sacred and secu-
Accounting education needs to encom- lar element. Conversely, According to
pass of moral ideology to produce ethi- Ahmad (1930: 32), from the Islamic
cal professionals. Grandfield et al. worldview and ethics, people cannot
(2008) argued that individual’s ethical behave irresponsibly with the goods,
ideology will affect the commitment equipment, land and talents entrusted to
level of professional. Emphasizing ideal- them, because they will hold to account
ism rather than relativism should be pre- for them (Gambling and Karim, 1991:
ferred for a universal set of rules and 34). The following areas may need to be
standards. In which the former is mainly addressed by the application of Islamic
focuses on human welfare rather than ethics.
individual’s concern in the latter This is
what AAOIFI (Accounting and Auditing Stakeholders Perspectives
Organizations of Islamic Financial Insti- Several criteria are of relevance when
tutions) has incorporate in the code. Is- examining Islamic ethical system from a
suing code of ethics inspired from Is- stake holders’ perspective : justice and
lamic values has been an obviously balance, trust and benevolence (Beekun
prominent step to manifest Islamic eth- and Badawi, 2005). Accounting infor-
ics into the practice. The code provides mation must be transparent and provide
not only principle of ethics for the ac- full disclosures in reporting business
countants, but also Shari’ah foundations transaction in permissible (halal) busi-
of the ethics. ness ventures; fair wages to employees;
provision of good and quality products
Providing both Islamic divine values to customers.
inserted to the material and the concept
of maslahah as the basics of ethical de- The Agency Theory
cision making process can be consider- The philosophy of materialism and the
able contribution of Islamic ethics to- more specific doctrine of economic ra-
ward accounting education. As the re- tionalism embedded in current account-
sult, this may lead to producing ethical ing practiced was adopted from western
accountants. accounting systems entails is diametri-
cally opposed to the value systems of the
whole society. Some of the assumptions
The Significant Contribution of that underlie theories of the purpose of
Islamic Ethics in Several Areas accounting information in western soci-
ety are at variance of Islamic teaching. A
Many studies and publications uncov- current example is an agency theory, the
ered a whole array of ethical issues relat- core of which is self interest (Baydoun
ing to misuse of proprietary information, and Willet,1997).
abuse of company expenses account,
plant closing and layoffs, misuse of The Islamic view is that profit must be
company assets, receiving inappropriate accompanied with the risk of loss and
gifts, endorsement of unauthorized pay- that relationship between capital pro-
ment and many more. These unethical vider and entrepreneur should be based
and immoral practices in the current ac- on the principle of partnership. Islam
134 R.A. Yunanda, N. Abd. Majid / Issues in Social and Environmental Accounting 1/2 (2011) 124-137
recognizes the fact that the owners/ fi- violate the concept of Islamic ethics.
nanciers of a firm have the right to make Specifically, the two general objectives
a profit, but not at the expense of the underlying the preparation of Islamic
claims of various other stakeholders corporate reports are; social accountabil-
(Beekun and Badawi, 2005). These ap- ity and full disclosure. The establish-
plications provide an indication of treat- ment of the justice to community re-
ing others with virtuous dealings. This quired an accounting system to inform
kind of action will spread a strong tie of and disclose to the society that is explic-
trust, brotherhood and cooperation that itly orientated to the public interest
can level out the problem of greedy and ( Istislah). This principle will end the
injustice which are prevailing in princi- day of SPEs practice.
pal and agent relationship.
answer the problem. Thus, taking a com- to realized the intended purposes.
prehensive look into the Islamic belief
which is inseparable from Islamic view
of responsibility leads to the ethical References
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