SHAREA ACCOUNTING:
AN ETHICAL CONSTRUCTION OF ACCOUNTING KNOWLEDGE
Triyuwono, Iwan and M.Gaffikin
Abstract
Accounting (knowledge) is one of the important means of reflecting reality, as different surfaces (values) will reflect different realities. When a reality has been socially constructed based on ethical values - Sharea (Islamic) values, there is a need, in order to reflect the same reality, for conceptualising and constructing accounting knowledge based on the same values. Predicated upon this view, this study in essence attempts to elaborate critically the ethical construction of accounting knowledge by sharing Sharea ideas on self’s perception of ethics, human nature (self) and society, and the ontology and epistemology of knowledge. By doing so, Sharea accounting knowledge not only can reflect the reality in an accurate manner, but also can assist in creating social reality ethically. Islamic methodology of knowledge ... must not be viewed as a negation of Western .legacy of learning. Rather it ought to be viewed as a much more broad and comprehensive methodology in which the materialistic methodology of empirical certification is merely a part (Bashir 1986b).
1. Introduction
Ethics has recently become an interesting topic in the accounting arena (see, for example, Francis 1990; Alam 1991; Gambling and Karim 1991; Chua and Degeling 1993; Schweiker 1993). Various writers, in essence, argue that ethics should be cohesively implanted in accounting practices, because ethics clearly signal and distinguish right from wrong, good from bad, and justice from injustice; thus, the importance of its presence in accounting is primarily in its real effects on the life of individuals in society. It was argued by Chua and Degeling (1993, 292) that "[accounting’s] rules not only influence how numbers are recorded in books of account but they help to change the ways in which people see, think, talk and relate to others" (see also Morgan 1988). Taking the same position, Francis (1990, 7) articulates that "[a]ccounting ... is a practice grounded in moral discernment." This means that the involvement of a moral agent, that is, the accountant, is crucial to the extent that he or she, through accounting, "can influence the lived experience of others in ways which cause that experience to differ from what it would be in the absence of accounting, or in the presence of an alternative kind of accounting" (Francis 1990, 7).
From another point of view, Dillard (1991) argues that accounting is a "technology." However, what he means by technology is not that which is commonly encountered and interpreted in a functionalist view, rather ... it is a technology that is not ideologically sterile. The "axioms, laws, etc." are not based on observed phenomenon, as purportedly is the case in the physical sciences, but emanate from the social sphere. For accounting, in spite of its apparent objectivity, there are no "physical absolutes" upon which to base, and verify, the technology. The framework is a social construction. The technology is framed by ideology. The interpretation of events, and even the specification of what constitutes an event, are functions of the socio-political point of view (Dillard 1991, 9).
The point of the statement is that accounting is not value-free; it is a social construction which develops and changes in the social sphere. Or in other words, the appearance of accounting is greatly influenced by the values in which it socially grows and is practiced.
From this statement, we can see two implicit value-based elements that shape the appearance of accounting, that is, the reality that would be reflected and accounted for (Davis et al. 1982; Morgan 1988; Dillard 1991), and the means that would be utilised to mirror the reality. Our perception of reality, as illustrated by Dillard (1991, 9), is like gazing into a mirror; the reality that we can capture is "what is reflected back to us." And, of course, the appearance of the reflected reality depends upon the surface of the mirror; because, as he argued, "[d]ifferent surfaces (ideological frames [values])reflect a different reality (Dillard 1991, 9; italics added)." Dillard (1991) goes on to argue that the output from accounting, which is determined by societal values, is projected onto the mirrors (also framed by the values) and its distortions are interpreted as "objective" representations of the realities or phenomena; the interpretations then become the resources for (re)shaping the realities, that is, both the mirror (the accounting) and the reality that would be reflected by accounting (Morgan 1988).
We see here that accounting (knowledge) is one of the important means of reflecting reality in that different surfaces (values) will reflect different realities. And we have to remember as well in this context that when reality has been perceived as ethically conceptualised and constructed, then it should be reflected by an appropriate means, that is, accounting which is also conceptualised and constructed based on ethical values. If it is not, accounting will reflect reality in other forms of appearance. Predicated upon this view, this study in essence attempts to elaborate critically the ethical construction of accounting knowledge by sharing Sharea (Islamic) ideas on self’s perception of ethics, human nature (self) and society, and the ontology and epistemology of knowledge.
2.Self’s Perception of Ethics
In the view of symbolic interactionists, self is the important element of the dynamic pattern of an individual (see Mead 1934, Blumer 1969, Charon 1979). Self is not a static being, rather it is always a dynamic one (Blumer 1969) which constantly experiences complicated social interactions which produces certain characteristics.
Having experienced the interaction, the self may internalise social values that exist in a society, and may or may not accept those values. When, for instance, an individual has internalised and accepted mainstream values of a society, he or she will actualise his or her covert (thinking) and overt action based on the perspective of those values. Some accountants or accounting researchers, for example, have constructed, shaped, and applied accounting (knowledge) based on the values and perceptions that individuals and firms possess a single goal of utility-maximisation (Chua 1986); while other accountants or researchers may take such actions based on their feelings that have a responsibility or a duty to maintain or create harmony in life (see, for example, Cottell and Perlin 1990; Riahi-Belkaoui 1992).
Obviously, values are the departing point from which the individuals act. By virtue of this, the individual may take action based on the values that he or she perceives and believes in. The action that has been brought forth is real in its consequences and it may become reality in the shadow of those values. Hence, looking at this, different values may reflect and create different realities. By values we mean no more than ethics; it is the basis of right-wrong or good-wicked considerations for the individual before embarking on a course of action. The ethics may be grounded in the view that: (a) "an agent has a choice between courses of action (or inaction) the right act is that which will produce the most happiness [utility], not just for the agent himself but for all who are in any way affected" (Mackie 1977, 125), that is, utilitarianism; or (b) in the sense that an ethical system is not built round "the notion of some goal that is to be attained but rather round the notions of rules or principles of action or duties or rights or virtues, or some combination of these" (Mackie 1977, 149), that is, a deontological system; or © it is based on religion. In the accounting arena, and in particular the accounting profession, deontologism is commonly utilised as the basis for setting the professional code of ethics (Cottell and Perlin 1990, 29; Riahi-Belkaoui 1992, 30), while accounting knowledge, especially mainstream accounting both in the sense of accounting research and theory building in general, makes use of utilitarianism, as identified by Chua (1986).
However, it is possible that accounting is not shaped by the values based on utilitarianism and deontologism, but is inspired by Sharea ethics, the Islamic ethics. With regard to this, Bin Ashari and Bin Mohamed (1989), Alam (1991), Gambling and Karim (1991), Hamid et al. (1993), Baydoun and Willett (1994), for instance, have attempted to blend ethics with their works. This is so since individuals have internalised Sharea values and, with their own intentions or objectives, have attempted to externalise the values in the form of developing accounting thought. In the Islamic world, some other contemporary disciplines, such as anthropology, art and architecture, economics, history, law, linguistics, philosophy of science, psychology, sociology, and so forth (see IIIT 1988; 1989), are also inspired by Shari’ah. Interestingly, in the context of economics Arif (1985) asserts that Islamic economics is constructed on and shaped by the values of Shari’ah; he even states that Islamic economics is built on the Shari’ah paradigm. In a Muslim society, according to Arif, a representative economic agent of the Islamic economic system is the Muslim man or woman, not the economic man or woman as perceived by capitalism. A Muslim has the perception that his or her purpose in life is to achieve falah, namely, the attainment of the pleasure of God, while the economic individual perceives him or herself as having a limited perspective of life which confines him or her merely to the maximisation of utility; thus, rationality and the criteria of success are based on this measure. In contrast, the criterion for success for a Muslim is following and adhering to the Shari’ah to achieve the falah. If, for instance, the Shari’ah asks the Muslim to be moderate, his or her Islamic rationality will drive him or her to be moderate and not to be selfish (see Arif 1985). Predicated upon this philosophic notion about the essential nature of a Muslim, Arif (1985) articulates that the Shari’ah paradigm is the beginning of a scientific revolution in Islamic economics which stands apart from the previous paradigms of Mercantilist, Physiocrats, Classical, Neo-classical, Marxian, Keynesian, and the Neo-classical counter revolution.
This illustration convinces us that an individual, because of his or her self, is always in a dynamic pattern stimulating any changes the character of which is greatly driven by the values of "ideology" that have been perceived and internalised through thoughts, actions and social interactions with which he or she lives.
3.Sharea View of the Nature of Human (Self) and Society, and Their Interrelationship
Burrell and Morgan (1979), in their set of assumptions concerning human nature, point out that social scientists view human beings in two extreme natures, that is, voluntarism and determinism. The former refers to the view that the nature of an individual is completely autonomous and free-willed, while the latter denotes a contrasting vision which sees an individual and all his or her activities as being definitely determined by the situations in which he or she lives. This set of assumptions is, among others, the factor that reflects a certain perspective of social sciences. When an individual, for example, perceives him or herself as a passive agent who is unable to create his or her own social world, he or she will see it objectively as a concrete structure, as if the social world has been constructed and he or she enters and lives within it. This view results in the epistemology of positivism which stresses the empirical analysis of concrete relationships in the external social world (Morgan and Smircich 1980). Under this view, hypothetico-deductive accounts of scientific explanations, and quantitative methods of data collection and analysis to generalise theory are accepted (Chua 1986), while the perception of the active agent generates social sciences which characterise the use of historic and ethnographic research, case studies and participation observation to attain scientific, temporal, and contextual explanations of human intention (Chua 1986), and of social reality.
Having viewed the importance of the perception of human nature, we would like to draw attention to some Islamic insights. In ghtis respect, Shari’ati (1979) argues that human beings are not only the viceregents of God, but are also the keepers of God’s trust. In all conscience, the trust, as interpreted by Shari’ati (1979) and Ali (1989), is "free will." Ali (1989) in this respect elaborates that free will is only possessed by human beings; the heavens and the universe do not have any (free) will of their own; they obey the will of God absolutely. In a more expressive illustration, Shari’ati clarifies this by stating:
[man] is the only being able to act counter to his own instinctual nature, something no animal or plant can do. For example, you will never encounter an animal voluntarily engaging in a two-day fast, or a plant committing suicide out of grief. Plants and animals can neither render great services nor commit treachery. It is not possible for them to act in a way different from that in which they have been created. It is only man who can rebel against the way in which he was created, who can defy even his spiritual or bodily needs, and act against the dictates of goodness and virtue. He can act either in accordance with his intelligence or in opposition to it. He is free to be good or to be evil, to resemble mud or to resemble God. Will is, then, the greatest property of man, and the affinity between God and man is apparent from this fact (1979, 76).
Of course, the degree of free will is not absolute, since absolute freedom belongs to God only (Nasr 1994). However, when the individual has actualised his or her free will - to be good or to be evil, to resemble mud or to resemble God, he or she must be responsible for his or her choice (al-Faruqi 1992). For al-Faruqi (1992, 101), responsibility is an implication of faith (tawhid, the belief in the oneness of God) for society. According to him, every individual carries his or her own burden in full consciousness which also means that it is the consequence of accepting the trust which is entrusted by God to the individual. Responsibility, within which its values are implanted in the inner consciousness of, and experienced by, the individual, is apparently "the essence of morality [ethics], for wherever it is absent, no deed can have moral value, and the higher, greater part of the divine will will not be realized" (al-Faruqi 1992, 101); whereas, the mission of Muslim society, the ummat, is to realise the Divine Will (al-Faruqi 1992, 91). So important is morality for Muslim society, that al Faruqi (1992, 94) even asserts that "no society can continue to exist, or survive in the long run, without morality."
Predicated upon responsibility and morality, an active and free-willed Muslim through social interactions with other members of the ummat expresses his or her values of faith and knowledge for the attainment of falah by realising the will of God. Virtuous actions, which depart from true faith and knowledge, are the real actualisation of God’s will. This clearly indicates that the virtuous actions themselves are the will of God. However, the actions are not a matter of good actions per se, rather they may be carried out by anyone, which indicates that Islam is a non-sectarian, non-racial, non-doctrinal, and universal religion (Ali 1989, 155), and is based on Islamic ethics which are expressed in the faith of "believing in God." By utilising freedom and intelligence, the acts of doing virtuous actions (which are based on Islamic ethics) indeed have a definite consequence or destination in that the doers and their society will attain felicity both in worldly life and hereafter (see Ali 1989; Nasr 1994). Freedom itself, which is manifested in the character of an individual as an active agent, is the will of God. This implies that, firstly, an individual is requested to be an autonomous and active agent who all at once is bound by his or her responsibility in the form of applying and adhering to codes of ethics, say, the Shari’ah; secondly, changes can only be made through knowledge. This means that the active agent has full consciousness in continuously searching for the basic laws of God, and predicated upon this, he or she may "translate" the laws into practical forms or construct social order based upon the laws and then consciously obey the laws that have been constructed; or in other words, the individual lets the laws of God determine his or her life; thirdly, the changes are constantly undertaken towards attaining a better condition, that is, the one which leads all members of society to the consciousness of attaining falah (Ali 1989, 154; al-Faruqi 1992, 109). Even though the changes may be made real and concrete, in terms of structure or social order (al-Faruqi 1992, 93-4) they do not necessarily alienate or enslave society and its members as the purpose of the changes itself is to emancipate individuals from "worshipping" other individuals, organisations, and social structure towards worshipping God alone. This is in all conscience the implication of faith in the oneness of God (tawhid) (see al-Faruqi 1992). Of course, this insight is distinctly different from the Marxian critical theory which is also concerned with emancipation, but departs from the materialistic view (see Burrell and Morgan 1979), the non-teleological and non-transcendental one, in the sense that the theory is limited only to the worldly affairs. Fourthly, conflict may be found in Muslim society, but it is not the expected reality (Ali 1989, 154, 1341), and so is a stable condition (status quo). This is so, because the members of Muslim society, as argued by Madjid (1987, 143) must continuously make an effort to develop and increase religious appreciation through making explorations which will enrich their experiences and strengthen their faith (see also Abdalati 1975; al-Faruqi 1992).