The relationship between accounting and governance in Islamic charities

Abstract

This study explores the phenomenon of accounting in religious charities in the United Kingdom (UK), it attempts to understand the accounting and governance practices in Islamic charities. A qualitative approach is adopted in this study. Data was collected from two selected Islamic charities using interviews, observations and document analysis. Semi structured interviews were conducted and participants were selected, based on theoretical sampling, ranging from president, directors, managers and senior officers. Data were subsequently analysed using grounded theory approach. The findings suggest that the Islamic charities' accounting and governance practices were driven by several factors such as integration of professionalism, values and belief. The core phenomena discovered - ‘Diaspora of Image and Excellence through Accounting’ underpins that the accounting role has evolved and spread rapidly within the charities, simultaneously with the increase in institutional funding. Good accounting practices and image help build public trust as well as ensuring sustainability of resources needed by the charities in the foreseeable future.
The notion of dichotomy of ‘sacred and secular’ was not present in both charities. The concept of Tawhid (Unity of God) that is central to the Islamic doctrine was demonstrated. It constitutes the acknowledgement that the ultimate ownership of wealth belongs to Allah (God) and human beings are entrusted as the guardian (Khalifah - Vicegerency) on this earth.
This research contributes to interpretive research by venturing into uncharted area’. It attempts to provide rich and meaningful insight into the realm of charity organisations particularly Islamic charities. It applies the lens of Institutional theory and Islamic perspective to build an emergent understanding in the UK faith-based charities. This research also attempts to make methodological contributions by applying the systematic grounded theory procedures in generating and building emergent theory. It provides example of practical usage of grounded theory prescribed procedures and tools.

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