Secondly, many of the conventional accounting objectives are irrelevant to Islamic accounting objectives. Adnan and Ghafikin (1997) give two examples of some of the accounting concepts that are
irrelevant to Islamic accounting such as the matching concept that leads to the preference of profit and loss orientation rather than the balance sheet approach. They argue that the objective of Islamic accounting is zakat. In fact, zakat is one of the many Islamic accounting objectives. Next, the objectivity concept that helps accounting users to make decisions not aligned with the primary objective of zakat.
Thirdly, conventional accounting is not sufficient to achieve Islam's socio-economic objectives. Quantitative information should be accompanied by qualitative information to enhance transparency and to achieve the concepts of truth and fairness. Some qualitative information is very crucial for the users to make decisions, for example, in the case of waqf, whether the distribution of the usufructs is made according to the waqf deeds and the performance efficiency of waqf assets' rental collection. So, it would be misleading if the waqf financial statements ignore such information. However, with conventional accounting, this type of information (non-financial information) is not mandated and users may have been deprived of this information "legally".
Henceforth, it is strongly argued that the present accounting system for waqf (which is based on conventional accounting) is not done according to the full shari'ah requirements. This should be noted and action must be taken to amend the situation. The discussion has also found that the historical cost basis is not in full agreement with the shari'ah and should not be followed. The historical cost valuation impairs the current value of waqf assets, where in the case of land; the value will always appreciate over time. For building and premises, though they are subjected to depreciation, their value may increase or decrease according to time, location and its condition. Therefore, there is a need for revaluation to determine its current value.
It is now clear that the theoretical framework of Islamic accounting is dichotomous to the conventional accounting (Shahul, 2000). Therefore, Islamic scholars should be able to derive the theoretical Islamic accounting frameworks, concepts, principles and rules specifically for Islamic accounting. It can be inferred from the arguments on the fundamentals of Islamic accounting and also the unsuitability of conventional accounting with all the issues that accounting for waqf should not be based on conventional accounting.
There should be a special set of accounting guidelines and procedures for the use of accounting for waqf, whereby the basic and fundamental concepts must be in compliance to the shari'ah guidelines and requirements (for example, an Islamic accounting for waqf).
As for the conclusion, Shahul and Hisham (2006) provide a model for Islamic accounting and accountability that relates Islamic accounting to the concepts of accountability with the view that man is the Khalifah; and is subsequently accountable to Allah (s.w.t) as the primary source of accountability (please refer to Figure 1 on the next page). In this instance, the waqif, mutawalli, the Ummah and the regulators are accountable directly to Allah (s.w.t.). In the due process of waqf, the waqif enters a waqf deed (social contract).
The mutawalli is responsible to other men as the beneficiaries through the waqf deed. The secondary accountability in this model is based upon the physical relationship between the mutawalli, the Waqf Department and the Ummah (beneficiaries). The mutawalli should use the Islamic accounting system in discharging his duties as the manager of the waqf and Khalifah of Allah (s.w.t). Therefore, in the context of waqf, the waqif and particularly the mutawalli have been made accountable to some amount of wealth or resources as an amanah or a trust, and this accountability is in accordance with specific shari'ah guidelines (Siti Alawiyah, 2004).
Figure 1: The Waqf Accountability Model (Shahul and Hisham, 2006)
It is argued that the current basis of the waqf accounts as used by the SIRC is very much in question as to its compliance with the Islamic shari'ah. Furthermore, the objective of conventional and Islamic accounting differs greatly, which makes conventional accounting unsuitable in the Islamic institutional environment. A few issues such as waqf assets and income recognition, asset measurement and valuation and disclosures need to be resolved before a complete framework of Islamic accounting on waqf is ready.
It should be noted that waqf is more than just financial records and accounts; rather it has a few objectives in helping the Muslims in their social and economics well being such as the provision of public goods such as free education and healthcare. This article argued that proper waqf accounting framework should provide the much-needed platform for good governance and enhanced the accountability of the waqf trustee in discharging their duties.
