To read this content please select one of the options below:

The impact of AAOIFI governance disclosure on Islamic banks performance

Tawida Elgattani (Department of Accounting and Finance, Portsmouth Business School, University of Portsmouth, Portsmouth, UK)
Khaled Hussainey (University of Portsmouth, Portsmouth, UK)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 16 November 2020

Issue publication date: 11 August 2021




This study aims to investigate the impact of the accounting and auditing organisation for Islamic financial institution (AAOIFI) governance disclosure on the performance of Islamic banks (IBs).


The ordinary least squares regression model was used to test the impact of AAOIFI governance disclosure on the performance of 126 IBs from 8 countries that mandatorily adopt the AAOIFI standards for three years (2013–2015). In this regression model, return on asset (ROA) and return on equity (ROE) are the dependent variables, while AAOIFI governance disclosure is the independent variable. Corporate governance mechanisms, firm characteristics, year dummy and country dummy are used as control variables.


This paper found an insignificant relationship between AAOIFI governance disclosure and IBs performance.

Research limitations/implications

This study highlighted the implication that the current research may help IBs and encourage them to disclose more information in annual reports, especially those related to AAOIFI governance standards because following good corporate governance leads to good financial performance. The major limitation of the paper is that it is only focussed on two measurements of bank performance – ROA and ROE; it would be good to use other firm performance measures, such as profit margin.


This study provides new empirical evidence on the impact of AAOIFI governance disclosure on IBs performance.



This paper is a slightly revised version of Chapters 3 and 7 of a PhD thesis entitled: “AAOIFI governance disclosure in IBs: Its determinants and impact on performance” by the first author of the paper (Tawida Elgattani) submitted to the Accounting and Financial Management Division, Portsmouth Business School, the University of Portsmouth (December 2018). Tawida would like to thank the supervisory team (Professor Khaled Hussainey and Dr Antonios Kallias and the examiners (Professor Mehmet Asutay and Dr Ahmed Aboud) for their valuable comments on earlier versions of her thesis). The authors of the current paper confirm that there is no copyright issue associated with their work.


Elgattani, T. and Hussainey, K. (2021), "The impact of AAOIFI governance disclosure on Islamic banks performance", Journal of Financial Reporting and Accounting, Vol. 19 No. 3, pp. 434-454.



Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

Related articles