The concept of assets and accounting standards in zakat governance: Enhancing transparency and accountability

Abstract

Zakat, a fundamental pillar of Islamic economics, mandates the redistribution of wealth from the affluent to the disadvantaged, contingent upon specific conditions met by every Muslim. In the realm of business, discussions surrounding zakat reveal critical challenges arising from conventional business frameworks and accounting norms. Assets, pivotal element in financial statements, serve as key elements in zakat computations. This paper delves into the Islamic perspective on assets, the application of accounting standards, and the role of Maqasid Shariah in zakat practices within business contexts. The analysis highlights the imperative of understanding asset concepts in zakat computations and integrating Maqasid Shariah into Islamic economic principles. It advocates for a reassessment of asset accounting methods for zakat, tailored to its unique objectives and requirements. By refining interpretations and adopting robust accounting practices, zakat governance stands poised for enhanced efficiency and effectiveness.