Islamic Business Ethics Review of Factors Influencing Prudence Accounting in Islamic Business

This study investigates the factors that influence prudence accounting in Sharia business using a literature study. The study of Islamic business ethics was conducted to obtain in-depth information on the relationship between the factors found and the principles of prudence accounting. The findings revealed that there are many factors found to influence prudence accounting such as financial distress, political cost, profitability, bondholders-shareholders conflict, and ownership. However, not a few studies have shown no significant influence such as tax incentives, bond ratings, audit committees, bonus plans, and leverage. These factors are largely determined by how the business managerial party carries out its functions properly or not. Islamic business ethics regulates all forms of behavior and actions in Sharia business so that they function as they should, starting from how to obtain business capital to the implementation of responsible operations. Likewise, the factors that influence prudence accounting. It can be concluded that Islamic business ethics support the positive impacts carried out by Sharia business actors in implementing prudence accounting. The positive impact in question is the impact of implementing behavior and actions that are by Islamic principles in business, including implementing the principle of prudence. Factors that implement Islamic business ethics are expected to have a positive impact on business, society, and the environment.