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Accounting and pseudo spirituality in Islamic financial institutions

Accounting and pseudo spirituality in Islamic financial institutions
Accounting and pseudo spirituality in Islamic financial institutions
The global financial crisis was followed by calls for a transformation of conventional finance, towards more ethico-aesthetic models. One avenue was to consider the alternative aesthetic of Islamic financial institutions (IFIs). IFIs offer profit-loss sharing (PLS) schemes as a distinctive spiritual alternative to conventional investment products. IFIs ontotheology clashes with the epistemology of modern banking and finance. The accounting for PLS creates tensions due to practical complexity that militates against implementation of the authentic Islamic financial contracts. This paper seeks to identify the role of accounting in IFIs' practice of interpretation to resolve the struggles that have taken place around the implementation of PLS schemes as a means of spiritual based financial alternatives. We explore how IFIs use accounting in rendering notions of spiritual/prophetic values applicable to practice or how it colludes against their implementation. Our study adopts a qualitative research methodology, framed around 40 interviews and observations of PLS implementation in IFIs in five Muslim countries in Asia and the Middle East, and one in the United Kingdom. We combine the literature on accounting and religion with the ideas/concepts from the literature on religion in organizations, political economy and Islamic law/finance. These perspectives enable us to better reveal how accounting works to reinvent spirituality. In our context we show how accounting mediates the conflicting interests and intentions that arise within the epistemological clashes that happen as the scared/religious strives to take its place in the capitalistic context of the conventional finance industry.
1045-2354
22-37
Hidayah, Nunung Nurul
f57c537d-8eec-4097-b209-d98a280469b1
Lowe, Alan
009783b7-4c42-4309-afaa-418765aedb6a
Woods, Margaret
840a8c1b-e0a9-4015-97d1-6a492117c4da
Hidayah, Nunung Nurul
f57c537d-8eec-4097-b209-d98a280469b1
Lowe, Alan
009783b7-4c42-4309-afaa-418765aedb6a
Woods, Margaret
840a8c1b-e0a9-4015-97d1-6a492117c4da

Hidayah, Nunung Nurul, Lowe, Alan and Woods, Margaret (2019) Accounting and pseudo spirituality in Islamic financial institutions. Critical Perspectives on Accounting, 61, 22-37. (doi:10.1016/j.cpa.2018.09.002).

Record type: Article

Abstract

The global financial crisis was followed by calls for a transformation of conventional finance, towards more ethico-aesthetic models. One avenue was to consider the alternative aesthetic of Islamic financial institutions (IFIs). IFIs offer profit-loss sharing (PLS) schemes as a distinctive spiritual alternative to conventional investment products. IFIs ontotheology clashes with the epistemology of modern banking and finance. The accounting for PLS creates tensions due to practical complexity that militates against implementation of the authentic Islamic financial contracts. This paper seeks to identify the role of accounting in IFIs' practice of interpretation to resolve the struggles that have taken place around the implementation of PLS schemes as a means of spiritual based financial alternatives. We explore how IFIs use accounting in rendering notions of spiritual/prophetic values applicable to practice or how it colludes against their implementation. Our study adopts a qualitative research methodology, framed around 40 interviews and observations of PLS implementation in IFIs in five Muslim countries in Asia and the Middle East, and one in the United Kingdom. We combine the literature on accounting and religion with the ideas/concepts from the literature on religion in organizations, political economy and Islamic law/finance. These perspectives enable us to better reveal how accounting works to reinvent spirituality. In our context we show how accounting mediates the conflicting interests and intentions that arise within the epistemological clashes that happen as the scared/religious strives to take its place in the capitalistic context of the conventional finance industry.

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Accepted manuscript - accounting and pseudo spirituality CPA - Accepted Manuscript
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More information

Accepted/In Press date: 11 September 2018
e-pub ahead of print date: 25 September 2018
Published date: June 2019

Identifiers

Local EPrints ID: 434633
URI: http://eprints.soton.ac.uk/id/eprint/434633
ISSN: 1045-2354
PURE UUID: b0306fac-2b62-4189-9bae-fb698142d1d3
ORCID for Nunung Nurul Hidayah: ORCID iD orcid.org/0000-0003-3178-4584

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Date deposited: 04 Oct 2019 16:30
Last modified: 16 Mar 2024 08:15

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Contributors

Author: Alan Lowe
Author: Margaret Woods

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