Accounting Standards for Awaqf: A Review

Abstract

The paper focuses on establishing accounting standards for the awqaf system in order to increase the efficiency and effectiveness of its operation. Standardization could cut costs and reduce the risk of mismanagement so that services provided by awqaf strengthen development fundamentals. Thus, it is essential that Muslim countries adopt unified accounting standards to ensure accountability and transparency of various transactions related to awqaf. This will provide flexibility concerning allocations of awqaf endowments so that priority will be given to projects related to people’s basic needs. The proposed framework is designed based on the literature review to conceptualize the need of standardization of accounting for awqaf. The contribution of this paper is to add value to the literature of accounting for awqaf.
 JEL Classification: M41, E23.

Waqf Accountability Around the World: A Mini-Review

“…coercive pressure such as government regulation contributes to challenges in the adoption of waqf accounting and reporting. Normative pressures contribute to challenges in formulating standardized waqf accounting and reporting, whereas mimetic pressure contributes to challenges in the comparability of the waqf accounting and reporting (Shaikh et al, 2019;Suhaimi Nahar & Yaacob, 2011).…”

“…Waqf is something that is given for public use (such as alms) or for purposes related to Islam, such as digging wells for public use or constructing a mosque (Shaikh et al, 2019). In the Arabic language, singular "Waqf" and the plural "Awqaf" means to stop, preserve, or contain.…”

“…The institution of waqf in Islam is a voluntary contribution the aim of which is to finance a variety of projects that enable the Muslim community to alleviate poverty, improving the quality of life, increasing productivity, and promoting knowledge and understanding. The development of waqf institutions worldwide is due to the need and the demand from Muslim communities (Shaikh et al, 2019) Endowment (Waqf) is a social institution in Islam that had such an important role in Muslim societies and the development of Moslem countries. But a waqf accounting system is differing from one country to other.…”

“…However, a few studies addressed the need of accounting standards of waqf. So, it is needed for accounting standards for waqf could help for harmonization practice among Muslim countries in the world (Shaikh et al, 2019).…”