ABSTRACT
In response to the growth of Islamic finance industry, researchers competingly debate whether the conventional reporting standards suffice capturing the innovative nature of Islamic financial products, which varies in substance from their conventional counterparts. Additionally, current literature lacks a thorough analytical review of the accounting of relatively less popular Islamic financing modes like Salam and parallel Salam. Addressing this gap, the current study extends existing literature to enable a more holistic assessment of the need for exclusive accounting standards for Islamic financing modes. This study examines the need for exclusivity in two steps. First, a hypothetical example presents Salam and parallel Salam modes under relevant conventional and Islamic financial reporting standards. Then, experts’ opinions are collected on the prepared extracts to calculate quality scores for financial reporting under conventional and Islamic standards. The results show that the conventional reporting standards have a higher quality score than the Islamic financial reporting standard. The study’s findings advocate for harmonizing the accounting practices of conventional and Islamic financial institutions, enabling more comparable and consistent financial reporting practices globally.
