Abstract:
The development of Islamic accounting in Indonesia has drawn both positive and
negative response. For the supporters of the latter, Islamic accounting is merely a
change of terminology as used in conventional accounting such as murabaha(cost-plus
sale), ijara(lease) and qard al hasana(beneficence loan). They even maintain that Islamic
accounting only mimics conventional accounting practices, without offering a distinctive
concept of a new accounting discipline. Therefore, Islamic accounting does not provide
a valid ground to claim as a unique accounting discipline. This study argues that
embryonic development of Islamic accounting has existed in the Dutch colonial times
(1596-1942). It can be traced from the work of an Islamic scholar and influential figure
Syeikh Muhammad Arsyad Al-Banjari(lived 1710-1812) who introduced the basic
principles and practice of Islamic accounting at that time. It could happen because a
majority of Indonesians has embraced Islam as their religion since 1400. That view is
supported by accounting theorists who noted that it is difficult to disentangle
accounting from socio-religious values as demonstrated by the early development
accounting in Italy initiated by a Franciscan monk in 1494. The study aims to investigate
the historical root of Islamic accounting in Indonesia in the pre-Indonesian
independence time, particularly during the Dutch colonial era. In retracing and
revealing the early development of Islamic accounting in Indonesia, the study employs a
bibliographic data sources strategy and institutional theory is chosen to be its
theoretical lens. Findings of the study reveal that early form of Islamic accounting had
been developed by Syeikh Muhammad Arsyad Al-Banjari, as he explained in his book
entitled Sabilal Muhtadin ([1780], 2005). The book contained a detailed procedure and
calculation on how muslims (Islamic adherents) should pay his/her zakat (compulsory
alms) to charity based on muslims’ wealth. In terms of institutional isomorphism, Al-
Banjarihighlighted the importance of normative isomorphism adoptionby zakat
organisations for boosting their organisational capacity in managing zakat fund.
Contribution of this study will offer an assurance to the muslim community that the
current development of Islamic accounting in Indonesia has historical root long before
Indonesian independence (1945). Thus, the rapid development of Islamic accounting in
the present days is not intended to imitate what has been achieved by conventional
accounting, since the two disciplines have their own world-views.
