Digital Transformation and Innovation in Islamic Accounting: A Literature Review on Inclusive and Sustainable Financial Practices

Abstract

The rapid development of digital technologies has transformed the financial sector and created new opportunities for enhancing transparency, inclusivity, and sustainability. Within this context, Islamic accounting, which integrates ethical and Shariah-compliant principles, faces increasing demands to innovate and adapt to digital transformation. This study aims to explore how digital innovation drives the development of Islamic accounting practices to support inclusive financial systems and sustainable development. Using a literature review, relevant studies published between 2010 and 2025 were identified from reputable databases such as Scopus, Web of Science, and ScienceDirect. The findings indicate that digital tools, including Islamic fintech, blockchain, and artificial intelligence, have significantly improved accountability, financial inclusion for underserved communities, and Shariah-compliant reporting for sustainability goals. Moreover, these innovations strengthen the role of Islamic accounting in aligning financial practices with the Sustainable Development Goals (SDGs). However, research gaps remain, particularly regarding empirical evidence on the effectiveness of these technologies in different contexts. This paper contributes by mapping current research trends and proposing a future research agenda that integrates digital innovation, maqashid al-shariah, and sustainability within Islamic accounting frameworks.