Abstract
Seemingly, a formidable ethical challenge to financial reporting is the phenomenon of fallacious and discretional financial reporting as
currently in practice. Such untruthful reporting intensified during the first
decade of the 21st century when many of the personnel got involved to
increase their personal benefits and the result was a wide-spread financial
fiasco in the form of MCI WorldCom, Enron, Well Fargo, and Tesco
accounting scandal, to mention a few. Most of the scandals were cause by
false reporting, withholding information about financial troubles, revenue
and earnings inflation, discretional revenue and expense recognition, use
of off-balance-sheet items, artificial increase of cash flow and profits,
backdating of sales contracts and accounting for vendors allowances and
financing. The research in hand is an attempt to discuss such issues in the
light of ethical and moral values that are not only recommended teachings
of Islam, but also accepted business ethics in the civilized world. Islamic
ethical guidelines for business encompass discipline and rules as enjoined
in the divine sources of Shar¯ı‘ah - Qur’¯an and Sunnah (sayings of or the
approved actions by the holy Prophet Muhammad PBUH). Implementation
of these guidelines to make financial reporting ethical should be acceptable
to the entire world, at personal, organizational, and society levels for broad
based benefits of the mankind.
Muhammad Akhtar, Irfan Ahmed , Sajid Gul, Najam us Sahar. (2019) An Alternative Model in Financial Reporting to Reduce Flaws and Injustice with Stakeholders, Journal of Islamic Business and Management, Vol ume 9, Issue 1.
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