Challenges of Implementing International Accounting Standards in Islamic Finance

This article provides a comprehensive analysis of the challenges associated with the implementation of international standards in Islamic finance accounting. The study examines methodological and institutional inconsistencies arising from the accounting treatment of interest-free financial transactions, with particular emphasis on the differences between International Financial Reporting Standards (IFRS) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards. In addition, the research highlights key issues related to Shariah compliance, the level of financial disclosure, the lack of a unified accounting approach, and limitations in professional expertise and human capital. The article argues that the effective adoption of international accounting standards in Islamic financial institutions plays a crucial role in enhancing financial transparency, strengthening investor confidence, and ensuring the sustainable development of the Islamic finance system. The findings of the study contribute to the development of practical recommendations aimed at improving the accounting framework of Islamic finance institutions.