Article Review of

ARTICLE REVIEW OF “FINANCIAL MANAGEMENT AND
ACCOUNTING IN STATE ISLAMIC RELIGIOUS COUNCILS IN

MALAYSIA: A GROUNDED THEORY” BY ABDUL RAHIM ABDUL
RAHMAN AND ANDREW GODDARD1
Wan Noor Hazlina Wan Jusoh
Academy of Contemporary Islamic Studies Universiti Teknologi MARA (UiTM) Terengganu
23000 Dungun, Terengganu, Malaysia
Tel: 6012-3595232 E-mail: [email protected]
Keywords: financial management, accounting, state Islamic religious councils, verstehen,

grounded theory
1. Introduction
Financial management and accounting are pivotal in any organization since the success or
failure of the organization depends on how the assets are managed within the organization
(Accounting Schools Online, 2012) regardless of its nature whether it is a business or
religious entity. However, as argued by the researchers in this sociology research, the study
on cultural and social background is needed in order to understand the organization’s
management. This is in line with what has been found by Hofstede (1998) that organizations
have cultures, even parts of organizations may possibly have different subcultures.
2. Research Objectives
Since there has been no far-reaching and organized study of these two managerial elements in
Islamic religious settings during that time and due to the lack of research in accounting
adopting grounded theory, the researchers conducted this study with two main objectives.
The first is to give a valuable insight pertaining financial management and accounting in
religious organizations generally and in Islamic organizations particularly. The second is to
present a model of how a grounded theory approach is undertaken in practice and
subsequently promoting its use in similar and different studies. Looking at the objectives of
the study, the researchers have lucidly explained the research gaps and supported them with
extensive and updated literature.
3. Research Design
As researchers want to study the management processes that are embedded in two Islamic
organizations in Malaysia, qualitative research method is chosen to develop the study. This
suits the nature of the study since qualitative research does properly seek answers to questions
by examining various social settings and individuals who inhabit these settings (Berg, 2007).
This research is a combination of two qualitative research designs i.e. case study and
grounded theory. Grounded theory as defined by Glasser and Strauss (1977) as the discovery
of theory from data is used to study the accounting verstehen2 of the two State Islamic
Religious Council (SRC) in Malaysia. The researchers have systematically undertaken three
interrelated phase of procedures in the analysis namely, theoretical
reflections, coding and theory generation. Each of the stage has been clearly explained in the
methodology part. In the coding phase itself there are three stages undertaken using the grounded
theory methodology, starting with the open coding, followed by axial coding and ended with
selective coding. The coding process is vividly summarized in Table 1 where the 32 provisional
categories (open coding) later were grouped into 11 substantive and theoretical categories (axial
coding). The final procedure in selective coding process is illustrated in Figure 1 finally develops a
theoretical framework of interrelated concepts. This proves that both authors have successfully
shows the whole social process discovered in the research.
The authors undertake interview, document exploration or documentary research, participant

observation and literature reviews as data collection methods in order to ensure and further
enhance the validity of the research. Face-to-face interview gives advantages to the researchers
in getting higher response rate and more accurate data (Zainuddin, 2010). However, the
interviewees’ details in this study are concealed for the purpose of confidentiality. In terms of
document exploration, annual reports, proposal papers, newspaper cuttings, minutes of meetings
were collected and compiled to be analyzed. On the other hand, observation as defined by
Sarantakos (1993) as a data collection method that employs the sense of vision as its main
source, was adopted to strengthen the reliability and validity of the data obtained from the earlier
tools. Finally, literature reviews of more than 60 sources comprising of journal articles and
books were referred in order to develop a robust theoretical framework. Undeniably, the authors
have excellently chosen the right methods to be adopted in this qualitative type of research which
is in parallel with the objectives aimed.
4. Research Findings
Among the findings found in this study is the sacred/secular divide was not evident in both
Islamic organizations. The study also showed that important differences in accounting practices
occur between organizations even within the same religious denomination. These differences are
owing to the different accounting verstehen in each organization which surface from the
differences in the complicated contexts of power and other cultural influences within which the
organizations located. In the conclusion part, the researchers have suggested a few research areas
to be explored using the developed theoretical framework which is beneficial for future studies.
5. Conclusion
In a nutshell, this study effectively contributes to the construction of a deep theoretical
understanding, or grounded theory of the financial management and accounting practices in
Islamic organizations. Simultaneously, the researchers successfully provide a model of how a
grounded theory is undertaken in practice. The study also fruitfully gives the understanding of
Asian management, in the context of religious organizations in Malaysia, in particular financial
management and accounting.

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ARTICLE REVIEW OF “FINANCIAL MANAGEMENT AND

ACCOUNTING IN STATE ISLAMIC RELIGIOUS COUNCILS IN

Keywords: financial management, accounting, state Islamic religious councils, verstehen,

The authors undertake interview, document exploration or documentary research, participant

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