Operationalizing Islamic Epistemology in Management Accounting: Ethical and Institutional Perspectives
Year: 2026
Type: article
Abstract: This paper systematically investigates how core Islamic epistemological principles Tawhid, Amanah, Adl, and Maslahah can be operationalized into measurable management accounting practices, and examines the moderating role of Islamic ethics in the relationship between competitive strategy and Maqasid Shariah-based performance. We employ a multi-method research design that integrates archival data analysis from Gulf financial markets, semi-structured interviews with managers and Shariah board members, survey data from five hundred managers across Malaysia, the UAE, and Saudi Arabia, and quasi-experimental analysis using UK business demography data. The findings provide preliminary empirical support for the proposition that Islamic ethical integration may moderate the relationship between competitive strategy and Maqasid Shariah-based performance. In particular, the observed patterns suggest that ethical integration may reinforce the positive association between differentiation strategies and performance while potentially constraining cost-leadership approaches when these are perceived to conflict with social and spiritual objectives. Given the limitations of the available archival evidence and the absence of detailed statistical estimates in this summary, these relationships should be interpreted as indicative rather than conclusive. Furthermore, our analysis reveals that AAOIFI-oriented reporting is associated with richer Shariah disclosure and stronger governance compared to IFRS, though adoption patterns vary substantially across jurisdictions. The micro-foundations analysis provides a framework for understanding how personal religiosity, organizational Islamic culture, and professional accounting socialization interact to shape ethical judgments in resource allocation dilemmas. Nevertheless, we identify substantial empirical gaps: the causal impact of Islamic financial literacy programs on entrepreneurial decision-making and business sustainability among Muslim SMEs in non-Muslim-majority contexts remains thin, and full archival data extraction for the 2016–2026 period from UAE and Saudi markets proved partially incomplete. The primary contribution of this research is a validated framework that bridges the conceptual divide between normative Islamic principles and empirical management accounting constructs, offering institutions a practical pathway to align their practices with Shariah objectives while maintaining competitive viability. This work therefore advances both theoretical understanding and practical implementation of Islamic business ethics in contemporary financial environments.
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7219981383