Constructing an Islamic Microeconomic Framework Based on the Qur’an and Hadith: Implications for Sharia Accounting

Abstract

Abstract

However, economic activities at the micro-level of the individuals and households are not only concerned with the resource allocation to meet their needs; these activities are also driven by values, objectives, and norms. Therefore, under an Islamic paradigm, economic activities cannot only be examined from the perspective of material benefits but also from those of ethics, accountability, and justice as well as adherence to the Sharia rules. Thus, this study endeavors to develop an integrated framework of Islamic microeconomics based on the Qur’an and Hadith and the consequences of such a framework for Sharia accounting. This study applies qualitative research method through an integrative literature review. Accordingly, relevant articles in national and international journals are reviewed thematically while Qur’an and Hadith are regarded as the major sources of norms. Specifically, the analysis centers on the Islamic paradigm including the worldview, economic behavior, consumption, production, exchange, markets, welfare, accountability, and Sharia accounting. The results show that Islamic microeconomics can be developed based on the integration of the Qur’anic and prophetic teachings together with the Islamic worldview of tawhid, khalifah, and amanah, as well as the objectives of maslahah and falah. Further, the results show that the construction is not only important but has substantial relevance for Sharia accounting. This is because, in this paradigm, accounting does not only refer to recording and reporting processes but also acts as a mechanism of accountability for economic behavior and resource management. What makes this study unique is the integration of these elements in the construction of a conceptual model which links Islamic microeconomics and Sharia accounting.