Harmonization and More International Consistency of Islamic Financial Reporting

The relatively recent widespread diffusion of International Accounting Standards (IAS)/Interna- tional Financial Reporting Standards (IFRS) has generated a series of consequences which were the subject of fruitful research and studies, both in the accounting profession and in the process of accounting harmoni- zation (Camfferman, Zeff 2006). The role of international standards is dominated by Anglo-American accounting thought and most of the standards follow the Western view of accounting. But over the past 25 years, a complex network of inter- linked economic, social and political changes have contributed to the wealth held by Muslims and to their need to make the most of this wealth in accordance with the principles of Islam (Dima, David, Paiusan 2010). Furthermore, the current standards, which are based on conventional frameworks, seem insufficient to guide Islamic financial institutions. In this respect, the aim of this article is to focus on analysis of the acceptance and harmonization process of these standards in countries with different accounting traditions and institu- tional conditions. Islamic countries are particularly involved in this new process, and the uptake of these standards in these areas is among the objectives of the IAS/IFRS Board. This paper gives a short presentation of the main characteristics of Islamic accounting and then focuses on the ongoing process of the IASB that aims to increase its outreach efforts for the best acceptance of IFRS also in the Islamic world.