Accounting and the fragmented self: institutional opacity, spiritual inequality and moral burden in Islamic finance

Purpose This study examines how Islamic financial institutions, despite claiming ethical legitimacy, may reproduce spiritual and moral inequalities. Drawing on Muhammad Iqbal's concept of khudi (Self), the study examines how institutional opacity, limited theological engagement and compliance-oriented practices displace moral responsibility onto individuals, forcing consumers to navigate financial choices amid guilt, uncertainty and fragmented ethical agency. Design/methodology/approach The study adopts a qualitative interpretive approach, drawing on 30 semi-structured interviews with UK-based Muslim consumers who currently hold or have previously held Islamic financial products. The data were analysed thematically to explore how individuals experience ethical ambiguity, self-surveillance and clerical authority, and how they resist the commodification of their faith within modern financial systems. Findings Rather than a transparent ethical alternative, Islamic finance asserts moral authority without substantive justification. Facing institutional opacity and limited theological reasoning, participants internalise moral risk through guilt and self-surveillance. This uneven clarity erodes trust in religious authority, intensifies spiritual disorientation, and exposes how institutions can privatise accountability while retaining institutional legitimacy. Research limitations/implications By introducing khudi as a counter-accountability framework to demonstrate that inequalities take spiritual and moral forms, the study offers a new ontological lens for reimagining accountability as a dialogical and emancipatory practice. It urges institutions, Shariah boards and standard-setters to move beyond formal, audit-driven compliance. It repositions accountability as a substantive ethical practice, demanding that claims of Islamic legitimacy be structurally transparent and publicly justified. Originality/value Extending critical accounting scholarship, the study reveals that inequality in Islamic finance is spiritual and moral. By introducing Iqbal's khudi (Self), it provides a novel framework demonstrating how calculative regimes can either fragment or sustain the transcendent Self, repositioning accountability as a site for reclaiming spiritual agency.