Mentally of Accounting in the Era of Indonesian Urban Society
Andrea Geovani and Erina Sudaryati
Airlangga University, Jl.Airlangga, Surabaya, East Java
Keywords: Mental Accounting, Urban Society, Pancasila.
Abstract: This paper aims to analyze and research the experts’ thoughts which are spread in books, articles,
documents, etc, about mental accounting in Indonesian urban society. In facing the rapid change of
modernization, Indonesian society might need to redevelop mental accounting with re-addressing the
national principle through interpreting accountancy with Pancasila as the national principle. Based on the
result of the research on each precept, it can be obtained a conclusion that the definition of accounting in the
perspective of Pancasila is human responsibility to God through humanizing human beings in the midst of
the development of urbanization in Indonesia; creating a fraternal spirit among people in it; elevating people
to an unqualified justice for anyone in the country; as well as balancing the physical and spiritual needs of
human beings in terms of financial and economic activities that can advance the nation's life to be better and
prosperous for all communities in it. Accounting in the perspective of Pancasila does not only emphasize the
material element alone.
1 INTRODUCTION
The majority of Indonesian society is the result of
uncontrollable urbanization as an effect of
industrialization and commercialization in urban
areas, especially big cities in Indonesia. Urban
society is social creature that needs other people in
their life; a group of people that need each other will
form a together life which is called society. In urban
society, globalization often shifts from agrarian
society to industrial society, which therefore
constructs urban life style, so that it creates
consumerism. Consumerism results in pseudo
necessities which can build a form of life style social
control which is run by society in daily life.
Indonesia, especially from the New Order which
makes use of western technology and foreign capital
which have produced new values in social life that
shift traditional culture that has been adhered from
long time ago (Heryanto, 2005) . Along with the
shifting of value, consumerism has as well spread to
both rural areas and big cities in Indonesia. Life
style is a characteristic of a modern world, so that
everyone who lives in a modern society will use the
notion of life style to describe both their own actions
and other people in their life.
The life style variables are also known as
psychographic characteristics since activities,
interests, and opinion are psychographic orientation
variables which could be quantified where life style
factors which are relevant to the marketer can be
seen from two levels (Ali, 2013). First, life style
largely tends to change. Second, life style can be
made as specific product determination basis.
Indirectly, if humans’ necessities are becoming more
complex in their life, especially urban society with
modern life style, it will surely be a high level of
consumerism. Science and technology can be said as
social activities processes which are highly
influenced by the necessities and value system that
lie in the society, so that its development is
inseparable from the socio-cultural values that lie
behind it (Armawi, 2007).
In urban life, the role of technology greatly
influences the progress of urban society, so urban
society is very dependent on electricity and
technology. One of them is technology in the field of
communication. Era of Fordism, it is a crucial point
in the application of economical development
technology, which is the massive commodity
production offset by massive scale consumption
(Jati, 2015). The massive consumption is due to the
increasing of society’s demand of commodities
along with the increase in the quality of goods.
Technology plays a role in increasing the added
value of a product thereby increasing the allure of
the public to buy it. In subsequent developments, the
use of technology then evolves into social behavior
and lifestyle for middle class groups. Ultimately,
Geovani, A. and Sudaryati, E.
Mentally of Accounting in the Era of Indonesian Urban Society.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 321-325
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
321

technology becomes a symbol for middle-class
groups to differentiate themselves with other
segments of society. However, it will have a
negative impact with the danger of individuality or
social autism when one is so dependent on the
communication technology devices they own.
Consumerism in Indonesia is reinforced by the
emergence of a new consumer class that is the
emergence of expenditure they spend per day
(Rosida, 2014). Consumerism that is currently a
lifestyle of urban Jakarta cannot be separated from
the culture of capitalism. They need the community
to continue spending their money on their products.
Without capitalism, consumerism will perish.
Capitalistic creations, such as television
commercials, is a community which inculcate a
consumptive characteristic. Accounting is a science
that is used every day and every moment in human
life. Accounting science is used by any societies or
institutions in the world. Accounting is a science that
is useful for humans in achieving predetermined
targets. Imagine what happens if it costs more than
the benefits we use. But, with this modern age, we
also need to prepare mental in facing this rapid
development of the age.
This research is expected to give benefits to the
development of accounting science, especially to
grow mental accounting in the era of urban
communities in Indonesia. Based on the result of the
research on each precept, it can be obtained a
conclusion that the definition of accounting in the
perspective of Pancasila is human responsibility to
God through humanizing human beings in the midst
of the development of urbanization in Indonesia;
creating a fraternal spirit among people in it;
elevating people to an unqualified justice for anyone
in the country; as well as balancing the physical and
spiritual needs of human beings in terms of financial
and economic activities that can advance the nation's
life to be better and prosperous for all communities
in it. Accounting in the perspective of Pancasila does
not only emphasize the material element alone.
2 METHODS
A research is not possible to be conducted without
any accompanying methods. Social sciences can be
conceptualized through four assumptions of
understanding related to the epistemological,
axiological, ontological, and human nature (Burrell
and Morgan, 2017). This research is based on the
ontology aspect of the reality that happened in
Indonesian urban society. This study looks at the
events that occur by conducting a subjective
observation by collecting facts that occur in the
field.
The research used in this paper is a qualitative
study based on the study of documents / texts. This
study observes and examines the thoughts of the
experts, whose thoughts are scattered in several
books, articles, documents, etc about mental
accounting. Qualitative research is a research that
intends to understand the phenomenon which is
experienced by the research subjects, such as
behaviors, perceptions, motivations, actions, etc by
describing in the form of words and language in a
special context of scientific and by utilizing various
methods that occur naturally (Bungin, 2005).
Another consideration of researchers that use
qualitative methods is because they are aware of its
weakness that cannot be avoided or can be released
in using this method.
In this study, the authors use the paradigm of
postmodernism as the perspective of thought. The
reason for using the paradigm of postmodernism is
the writer’s desire of not only criticizing the
meaning, but also incorporating new values in that
meaning.
3 RESULTS AND DISCUSSION
Most of the concepts in theories of the study of
accountant are from other sciences, especially
behavioral science. Behavioral science alone mostly
refers to both psychological and sociological
concepts related humans’ daily life. The mental
budget works when one can track the outcome and
assign the account they have (Heath, 1995). Time
becomes increasingly important to a person because
"this is the scarcity that creates value”. This scarcity
of time has resulted in many technological advances
for time efficiency, such as the use of washing
machines and micro-wives, to dependence on fast
food and concluded that time precious resource
equal to money (Jacoby, Szybillo, and Berning,
1976). A mentally of accounting is a psychological
account established by an individual to evaluate the
costs and benefits of results that are then evaluated
using prospecting theory principles (e.g. avoidance
loss, risk seeking behaviors for loss etc. (Kahneman
and Tversky, 1984).
Modern is a symbol of the abandonment of the
non-modern past, into a better present
(Mulawarman, 2014). The past attaches importance
to the proximity of supernatural powers such as
theology or religion, whereas the modern views the
forces outside of man no longer plays a significant
role in humans’ life. Understanding modernity, like
producing modern accounting today, is connoted as
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
322

an "instrumental" process of the recording activity
performed by a company. Pancasila explains the
relationship between spirituality with ethics
(Ludigdo and Kamayanti, 2012). By using Pancasila
as the basis of accounting ethics code, Indonesia will
also return to the roots of the state and liberate it
from ethical imperialism. Accounting in general, is
almost always connoted as an activity of recording
and conveying financial information in the realm of
a company's activities.
The abandonment of "God" in the world of
science, because God, the religious values, and the
human (subjective) soul that are the center and the
meeting of God's "values" and the consciousness of
the absolute truth of the scriptures, are no longer
allowed into the universe realm and scientifically-
societal realities. Accounting (and Economics in it)
is hand in hand to form a new theology, to the
miraculous way of working the market through The
Invisible Hand for prosperity, altering personal
greed (seen in bottom line profitability, linearity
equity, and progressive cash availability) to social-
virtue (common good), which lead to the rationality
of science-technology developed for the benefit of
profit.
Capitalism is the tip of the technical interest of
positivism and empiricism that occurs in the real
world. The continued impact of the
multidimensional crisis is a crisis in developed
countries such as the psychological crisis of poor
fear, terrorism, alienation, dependence on drugs and
technology, and others. The nature of accounting
positivism is the attitude of individual life and
hedonistic as well as materialistic lifestyles, the
nature of sin thus makes human relationships be
limited to mundane matters only and forget the
existence of God that accompanies the life that
occurred in this world (Achsin, 2006). In facing the
rapid development of the modern era, perhaps
Indonesian people need to re-grow mental
accounting in the current era with being back of our
country’s philosophy, which is by interpreting
accounting through Pancasila. The values found in
Pancasila are an attempt to counter the imperialist
attacks that are in fact the fruit of capitalism itself
(Sitorus, 2015). Adoption of accounting based on the
element of capitalism emphasizes the element of
maintenance of power. The maintenance of power
to God is Taqwa. Taqwa is a believer’s awareness of
God’s presence in his other daily life and
transactions with others (Iqbal and Mirakhor, 2011).
Accounting is full of elements that are rational for
the sake of business development, especially in the
era of urban society which its development is
increasingly rapid. Thus, accounting based on the
influence of capitalism is full of masculinity
elements. Definition of accounting based on the
principle of God the Almighty is a process of human
responsibility to God in terms of financial activities.
In Islam, it is also written in the Qur'an.
"Truly the true religion of Allah is only Islam."
(Quran Ali Imran: 19).
As a Muslim who believes in the holy book of
the Qur'an, the first precept is tauhid, which believes
that God is only one. Indonesia is a country with a
variety of religions or pluralism state which also
certainly believes that God is one and cannot be
partnered. It refers to the command with believing in
the essence of God by obeying all the
commandments set by God. the first principle
requires that there should be a divine value in the
accountant's ethical code. In this case, with the life
of capitalism in the era of increasingly advanced
urban society, accountants who work need to pay
attention to the codes of ethics that have been
established (Ludigdo and Kamayanti, 2012). This is
certainly necessary to avoid the occurrence of
deviant behavior by taking into account the
prevailing ethical code, so as to create honesty in the
work. The definition of accounting based on the
precepts of "Just and Civilized Humanity" is the
process of humanizing human beings in terms of
financial activity.
"Allah does not forbid you to do good and be fair
to those who do not fight you because of religion
and not (also) chase you away from your homes.
Allah loves those who are fair ". (Quran Al
Mumtahanah: 8).
In the economy of capitalism that occurs in urban
society, it appears that everyone competes in
business activities to earn maximum profit without
being aware of the surrounding. Sometimes, this
makes the assumption that the economic life which
is happening is the rich who become richer and the
poor who become poorer. In fact, this has been
arranged in Pancasila that we need to be fair. In
addition, in the Qur'an it has also been ordered to be
fair to others. Business that occurs in the midst of
technological advancement in the era of urban
society sometimes makes urban communities forget
the principle of justice to others, thus making the
social gap in the community. In accounting, fair and
honest attitude are needed in the process of
recording and presenting process in financial
statements in a company by not manipulating
activities associated with accounting within a
company. This does not fit the theory capitalism is
identical with the pursuit of profit, and forever
renewed profit, by means of continuous, rational,
capitalistic enterprise (Weber, 2002). Accounting
Mentally of Accounting in the Era of Indonesian Urban Society
323

definition based on the precepts of "Unity of
Indonesia" is the process of creating a spirit of
brotherhood in terms of financial activities.
"O people, we have created you from a man and
a woman, and We have made you nations and
tribes to know one another. Surely your glory in
Allah's sight is the more pious among you.
Verily Allah is Knower, Most Thorough."
(Quran Al Hujuraat: 13).
The life of urban people with tight routines
certainly reduces the sense of concern for each other.
Even in the economic life of capitalism, they are
mostly just chasing profit. In the third principle of
Pancasila, it is written “The Unity of Indonesia”,
whereas people should create a fraternal spirit,
especially in terms of daily activities for financial
activities. This certainly fosters the attitude of spirit
among fellow citizens to increase the sense of unity
in the life of this nation amid the changes that occur
in the urban society in Indonesia. In the Qur'an, it
has also been written that God creates human beings
to get to know each other to create the mental
accounting with a strong sense of unity in people's
lives.
Definition of accounting based on the precept of
"Democracy Led by the Wisdom of Deliberations
among Representatives" is a process of raising
people in terms of financial activities that occur in
everyday life in society (Fishkin, 1991).
"And those who carry out the call of their Lord
and perform the prayers, while their affairs are
by deliberation between them and spend some of
the sustenance We have given them." (Quran
Ash Shura: 38)
In the capitalist economic system occurring in
urban society, a company is owned by an individual
whereas every individual is freed to possess all the
wealth he has earned, resulting in personal
satisfaction (Wallerstein, 1974). In the economy of
capitalism in urban society, there is recognition of
private rights, because the economy in it is governed
by the occurring market mechanism, so that people
are only always pursuing self-benefiting interests
alone. Sometimes, this system does not benefit the
community as a whole, especially people with lower
economic condition. In fact, in the fourth precept, it
has been written that the government should be able
to raise the degree of people in financial terms by
providing the needs of society equally and able to
provide rules that can create welfare in all levels of
society without discriminating one with another. It is
also written in Islam that the resources within a state
are entrusted from Allah to all mankind. The main
driving force of the economy is cooperation, and
Islam rejects the accumulation of wealth that is only
controlled and benefiting certain parties only.
Ethical behaviour is suggested to be a prescriptive
value that is normally embedded in one’s character
and ethical values such as truthfulness, honesty,
justice, and fairness are not inherited but need to be
nurtured (Mohd Nor, 2012).
The definition of accounting based on the
precept "Social Justice for the Whole People of
Indonesia" is the process of balancing the physical
and spiritual needs of mankind in terms of financial
activity to build populist economy.
"O you who believe, be you one who upholds
justice, be a witness for God, though against
yourself or your father's mother and your
brothers. So do not follow your passions so you
do not do justice. And if you turn back justice or
refuse to be a witness, then surely Allah is the
Knower of what you do." (Quran An Nisaa:
135).
The occurrence of capitalism in urban society
with the economic system that occurs gives the right
of individual freedom in it to implement the wheels
of the economy, such as producing goods and
services, sell or market and distribute. The economic
system that follows the Shariah parameters which
ought to accomplish the objective of social and
economic justice (Chapra, 1975; Shiddiqy, 1976)
(Ahmad, 1981) .Whereas within this system, every
individual is free to compete without thinking about
the circumstances surrounding them, because they
are only thinking of ways to make the most profit. In
the life of capitalism, every individual is free to
compete in order to win free competition in various
ways. The government should be able to participate
in economic activities by taking a role fairly. This
has been arranged in the fifth precept of Pancasila
which is the process of balancing the physical and
spiritual needs of human beings in terms of financial
activities to build a populist economy. It has also
been regulated in Islamic Religion that we need to
be fair in economic activities within a society, in
order to create a system of economy which is
capable of prospering all the people within it, not
just certain parties.
Based on the result of the research on each
precept, it can be obtained a conclusion that the
definition of accounting in the perspective of
Pancasila is human responsibility to God through
humanizing human beings in the midst of the
development of urbanization in Indonesia; creating a
fraternal spirit among people in it; elevating people
to an unqualified justice for anyone in the country;
as well as balancing the physical and spiritual needs
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
324

of human beings in terms of financial and economic
activities that can advance the nation's life to be
better and prosperous for all communities in it.
Accounting in the perspective of Pancasila does not
only emphasize the material element alone.
5 CONCLUSIONS
Pancasila is human responsibility to God through
humanizing human beings in the midst of the
development of urbanization in Indonesia; creating a
fraternal spirit among people in it; elevating people
to an unqualified justice for anyone in the country;
as well as balancing the physical and spiritual needs
of human beings in terms of financial and economic
activities that can advance the nation's life to be
better and prosperous for all communities in it.
Accounting in the perspective of Pancasila does not
only emphasize the material element alone. If the
application of this accounting is fully interpreted, the
creation of an accounting paradigm will not only
focus on the mind on self-interest, but also note the
interests of God and fellow creatures that exist on
earth this. For future researches, this research can be
further developed with more complete and accurate
data, so this research can provide benefits for us all.
ACKNOWLEDGEMENTS
We would like to thank reviewers for comments and
suggestion regarding to turbine engine analysis. We
also like to thanks for support from Department of
Accounting of Airlangga University.
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