Multiple logics within the international Islamic financial architecture: implications for Islamic financial reporting standards

Abstract

Purpose

This paper aims to examine the existence of multiple institutional logics among a number of organisations within the international Islamic financial architecture (IIFA) whose main purpose is to promote and support the development of Islamic financial institutions (IFIs) across the globe and how IIFA relates to the role of Islamic financial reporting standards.

Design/methodology/approach

The authors review websites of 11 IIFA’s constituent organisations and undertake 7 in-depth, semi-structured interviews with senior members of a selection of these organisations to identify the dominant logics by which their role and (inter)action within the IIFA are shaped.

Findings

The study findings reveal evidence of competing (and shifting) logics and political interests that seem to have led to contradictions and inconsistencies among the constituent organisations. The authors explain this by proposing a framework consisting of religion logic, market logic and corporate logic that intertwines with the underlying economic system and acts as sources of identity–legitimacy–authority for the respective organisations.

Originality/value

The authors bring to light some key issues that may pose a threat to the sustained existence of IFIs. The authors adapt the institutional logic framework and incorporate it into religion logic within the context of Islam (i.e. hifdzul-din as the first Maqasid ul-Shari’ah), resulting in some fresh theoretical perspective that may inform future research.

Citation

Mukhlisin, M. and Fadzly, M. (2020), "Multiple logics within the international Islamic financial architecture: implications for Islamic financial reporting standards", Accounting Research Journal, Vol. 33 No. 6, pp. 709-727. https://doi.org/10.1108/ARJ-03-2020-0059