Ontological and epistemological disequilibrium: harmonization of Islamic financial accounting standards and the economic political interests in Indonesia to Maqasid’ul-Shari’ah

Purpose This study aims to investigate the harmonization of Islamic financial accounting standards with economic and political interests in Indonesia, focusing on the challenges and strategies necessary to achieve equilibrium while adhering to Maqasid ul-Shari’ah principles. This study also aims to explore the conflicts between Shariah compliance and conventional financial practices. Design/methodology/approach This study used a qualitative methodology with an exploratory approach. Data were collected through semi-structured interviews with Islamic finance experts, practitioners and stakeholders. NVIVO software was used for data analysis, which involved coding, pattern formation and thematic exploration to draw insights from the respondents’ perspectives. Findings This study reveals a significant gap between the idealistic goals of Shariah principles (ontology) and their practical application in the financial industry (epistemology). It highlights the challenges posed by economic and political pressures, inconsistencies in fatwa interpretations and integration of conventional accounting standards. Harmonization is viewed as a necessary yet complex process to bridge these gaps while maintaining compliance with the Maqasid ul-Shari’ah. Practical implications The findings emphasize the need for stronger regulatory frameworks, transparent standards and competent human resources to address discrepancies in Shariah compliance. Practical strategies include leveraging adaptive accounting practices and fostering collaboration between stakeholders to align financial reporting effectively with Islamic principles. Originality/value This study provides novel insights into ontological and epistemological conflicts in Islamic finance and offers practical recommendations for achieving harmonization. It extends the discourse on how Islamic financial institutions can balance Shariah’s adherence with global economic and political realities, providing a roadmap for policymakers and practitioners.