Answered by Shaykh Gibril F Haddad
Wa `alaykum as-Salam:
Muslims atone for sins by resolving repentance in the heart, earnestly seeking forgiveness from Allah Who is infinitely merciful, and taking the necessary steps in steering clear of recidivation and eliminating the harm done as a consequence of sins, such as mending the rights that were violated and assuming consequences. Some atonements carry obligatory ritual forms such as fasts, almsgiving, or sacrifices, others voluntary.
Sacrificing an animal atones for sins in a sense that carries significance for the atoners and the rest of creation, not for the Forgiver. That is, Allah is able to forgive without the least expiatory sacrifice and He is not bound by it to forgive. But He has made it purposeful sacrifice religion and He has assigned it value in the economy of His creation and in the balance-scale of one's struggle to increase goodness in oneself and in the world. Sacrifice in this understanding is a Prophet-sanctioned and Prophetically-modelled offering spent from one's property that carries home the meaning of expiation in one's heart, in the society, and in the entire universe. Thus, Allah may cause the purposed almsgiving of shillings at the beginning of the day to grow so much as to deflect, in the economy of His creation, a harmful car accident at the end of the day. This is legible only to believers in a morality system that transcends visible causes and effects, and becomes more and more evident in proportion to one's faith, without which only ritual forms remain.
There is plenty more on this topic in the archives of the Hanafi list, please look it up there. [See: (http://www.sunnipath.com)]
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