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1 – 10 of over 42000Sherif El-Halaby, Sameh Aboul-Dahab and Nuha Bin Qoud
This paper aims to systematically review the existing studies for Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards which include…
Abstract
Purpose
This paper aims to systematically review the existing studies for Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards which include different tracks of researches and then identify the gaps to propose opportunities for future research.
Design/methodology/approach
By adopting a systematic literature review approach, 46 papers that were published between 2000 and 2020 from 23 journals concerned with AAOIFI were selected for review and analysis.
Findings
The authors combine electronic searches to identify relevant studies using keywords such as “AAOIFI” or and “Islamic standards.” In light of the existing studies’ limitations, this paper derives and summarizes five leading future research tracks: identifies the research gaps in AAOIFI and then suggests that AAOIFI still requires more empirical analyses; identifies the alternative analytical methods as meta-analysis; identifies additional measurements for macro and microeconomics factors; identifies recent tracks as corresponding to Covid-19 pandemic; and future studies should consider the role of central banks and positive criticism for AAOIFI.
Practical implications
This analysis address the literature gaps on measuring compliance, determinants and consequences of AAOIFI adoption as this study serves as a guide for the researchers, regulators and Islamic financial institutions in research associated with this area. The findings would support AAOIFI, regulators and related authorities across jurisdictions with suggestions on improving the current AAOIFI practices.
Originality/value
This literature review is a historical record and guidance for researchers who seek to examine and explore several questions about AAOIFI. To the best of the authors’ knowledge, this is the first paper that applies systematic literature review over AAOIFI research field.
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Md. Hafij Ullah, Ruma Khanam and Tabassum Tasnim
This paper aims to examine the compliance status of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Financial Accounting Standards-1 and Islamic…
Abstract
Purpose
This paper aims to examine the compliance status of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Financial Accounting Standards-1 and Islamic Financial Services Board (IFSB) Standard-4 by Islami Bank Bangladesh Limited (IBBL), recognizing the regulatory influence for complying with AAOIFI and IFSB standards and identifying the factors influencing the compliance with these standards.
Design/methodology/approach
The present study used content analysis approach for investigating the compliance status. The study considered IBBL as the only sample because it is the only Islamic bank in Bangladesh which is the member of both AAOIFI and IFSB. Hence, this paper investigated the compliance status of IBBL as a member of AAOIFI and IFSB. The study examined the annual reports of 2008-2012 as these were the latest and contemporary reports in 2013 when the study was conducted. SPSS software version 22.0 was used to analyze the data. A total of 203 items under 13 categories of AAOIFI standard and 133 items under 17 categories of IFSB standard were considered. Ordinary least squares was run to test the hypotheses of the study.
Findings
The study found that IBBL on an average complied 46.31 per cent of AAOIFI and 52.50 per cent of IFSB standards during the period, and importantly, IBBL did not comply some of the categories of required disclosures. The study also observed that size, as measured by total asset and number of branches, has a significant influence on compliance with IFSB standard, but not AAOIFI. The findings of the study depicted that IBBL did not reasonably recognize the importance of complying with AAOIFI and IFSB standards. Poor compliance or non-compliance with AAOIFI and IFSB accounting and reporting standards by IBBL exposed that the bank is not efficient in managing Shari`ah compliance risks, operational risks and transparent financial reporting. Therefore, recognition of the Shari`ah standards by the respective IFIs and a “regulatory push” is vital for improving the level of compliance with these standards.
Research limitations/implications
The study considered IBBL as the only sample of the study because it is the only Islamic bank in Bangladesh which holds the membership of both AAOIFI and IFSB. The fiscal years 2008-2012 only were selected to evaluate the compliance status of the AAOIFI and IFSB standards in preparation and presentation of the financial statements of IBBL for comparative analysis because IFSB standard for accounting and disclosure was formulated in 2007; hence, the study could not evaluate the compliance status before 2008.
Practical implications
The study will help IBBL in identifying their limitations in complying AAOIFI and IFSB standards and also the regulators in designing the accounting and reporting frameworks in regulating Islamic banks in Bangladesh. The study would help IBBL in identifying the reasons for non-compliance, how improvement in compliance level may help the bank in mitigating Shari`ah compliance and operational risk and how new legal and institutional framework may improve the level of compliance with those standards.
Social implications
The study observed that the AAOIFI and IFSB standards were set for increasing the level of Shari`ah compliance, but the compliance status showed that different classes of accounting and reporting were ignored from compliance by IBBL. This study will benefit the stakeholders in choosing a Shari`ah-compliant bank.
Originality/value
This is a unique study which considered both AAOIFI and IFSB accounting and reporting standards in evaluating the reporting compliance status of an Islamic bank and identified the influence of reporting compliance on managing Shari`ah compliance risks, operational risks and transparency. This study expects to instigate the Islamic banks in complying accounting and reporting standards for being Shari`ah-compliant.
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Using the backdrop of an (apparently) extended visit to the West Indies, analogies with key concerns of internal audit are drawn. An unusual and refreshing way of exploring the…
Abstract
Using the backdrop of an (apparently) extended visit to the West Indies, analogies with key concerns of internal audit are drawn. An unusual and refreshing way of exploring the main themes ‐ a discussion between Bill and Jack on tour in the islands ‐ forms the debate. Explores the concepts of control, necessary procedures, fraud and corruption, supporting systems, creativity and chaos, and building a corporate control facility.
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Yosra Mnif Sellami and Marwa Tahari
The purpose of this paper is to investigate the compliance level of Islamic banks with disclosure accounting standards in some Middle East and North African countries, and most…
Abstract
Purpose
The purpose of this paper is to investigate the compliance level of Islamic banks with disclosure accounting standards in some Middle East and North African countries, and most importantly to analyse the factors associated with compliance.
Design/methodology/approach
This study uses a self-constructed checklist of 203 items to measure the compliance of 38 Islamic banks with disclosure accounting standards during the 2011-2013 period. A multivariate regression analysis is used to determine significant factors influencing the extent of this compliance.
Findings
The results show a wide variation in compliance levels among the disclosure accounting standards and reveal that compliance is positively related to the listing status, the existence of an audit committee, the bank’s age and the country of domicile.
Research limitations/implications
This study analyses the compliance level with only disclosure accounting standards. It remains to future research to examine compliance with all Accounting and Auditing Organization for Islamic Financial Institutions’ Financial Accounting Standards (AAOIFI FAS). Moreover, the explanatory power of the model remains modest. This connotes the existence of omitted variables that could be explored in future research.
Practical implications
The research contributes to the international financial accounting literature about the banking industry. The results are relevant for researchers, accounting professionals, stakeholders, standard-setters and regulatory bodies that are concerned with Islamic banks’ disclosures.
Originality/value
Although AAOIFI was established since 1991, very few empirical studies about compliance with the FAS have been undertaken. To the authors’ knowledge, there are no studies that investigated the determinants of compliance level with AAOIFI FAS. Then, this study concentrates on disclosure accounting standards (FAS 1 and FAS 5) with a high risk of non-compliance.
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Md. Harun Ur Rashid, Ruma Khanam and Md. Hafij Ullah
This paper aims to examine the compliance status of Islamic banks in Bangladesh with Shari’ah-based accounting standards named Islamic Financial Services Board (IFSB) standard-4…
Abstract
Purpose
This paper aims to examine the compliance status of Islamic banks in Bangladesh with Shari’ah-based accounting standards named Islamic Financial Services Board (IFSB) standard-4 and its association with corporate governance.
Design/methodology/approach
The six years of secondary data, including the annual reports of 2013–2018, were collected from the websites of all the seven listed Islamic banks, i.e. 100% of the population available during the period of study. The study used a content analysis approach for systematically categorizing and analysing the contents disclosed in the annual report. A total compliance score based on 133 reporting items of IFSB standard-4 were considered for content analysis. Furthermore, this study applied the ordinary least square to investigate the impact of corporate governance on IFSB standard-4.
Findings
This study found that the level of compliance with the IFSB standard by the Islamic banks in Bangladesh is poor, as the overall compliance status is 44.83%. Further, this study observed a significant and positive influence of the Shari’ah supervisory committee, the board size, accounting experts on the board, foreign ownership and institutional ownership on the level of compliance with IFSB standard-4. On the other hand, this study found a negative effect of directors’ ownership on the level of compliance with IFSB standard-4.
Practical implications
This study provides the management of Islamic banks an insight into developing their governance characteristics to comply with Islamic accounting and reporting standards. Moreover, this study expects to facilitate the management of Islamic banks in designing their accounting and reporting outlines to enhance the level of compliance with the IFSB standards.
Originality/value
This pioneering study on IFSB standards opens an avenue to the researchers exploring the accounting and reporting status of Islamic banks considering the requirements of the IFSB standards.
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The purpose of this study is to explore the impact of internal audit (IA) compliance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA…
Abstract
Purpose
The purpose of this study is to explore the impact of internal audit (IA) compliance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA) on financial reporting quality (FRQ).
Design/methodology/approach
Data were gathered from 142 chief audit executive from Saudi listed companies, and also from the annual reports of the participating companies. Two proxies are used to measure FRQ, namely, discretionary accruals and accruals quality.
Findings
The findings reveal that companies demonstrating higher IA compliance with standards have better FRQ. They also indicate that the interaction between IA competency and its compliance with standards has an impact on FRQ. Further, the findings provide evidence that FRQ is higher in companies where IA departments have formal documentation, that is, entirely consistent with the ISPPIA. These results retain their robustness after further analysis.
Originality/value
In offering these findings, the paper contributes to the existing IA literature by introducing evidence from a Middle Eastern context, namely, Saudi Arabia, of the link between IA compliance with the ISPPIA and FRQ. It confirms the role of IA in FRQ, and hence, as an element of corporate governance, information, which is valuable for both the institute of internal auditors and companies.
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Joseph Adam Longo, Adam Meshack Akyoo and Olav Jull Sørensen
The purpose of this paper is to examine the determinants of awareness of and compliance with chicken feed standards among chicken farmers in Tanzania.
Abstract
Purpose
The purpose of this paper is to examine the determinants of awareness of and compliance with chicken feed standards among chicken farmers in Tanzania.
Design/methodology/approach
A total of 107 respondents in two regions were selected through simple random sampling. Structured questionnaires were used to collect data. Descriptive statistics and multiple regression approaches were used in data analysis.
Findings
The results revealed that the level of awareness of standards is low and the compliance level is even lower at the same time as the data indicated a positive relation between awareness and compliance. Attending seminars, knowledge dissemination by extension agents, farmers’ awareness of the existence of other standards and health consciousness have a significant and positive influence on awareness of feed standards while the age of the farm and dependence on farm formulated feeds have a significant negative influence on awareness of standards. On the other hand; knowledge dissemination by TBS, awareness of chicken feed standards and awareness of the existence of other standards apart from chicken feed standards, have a significant positive influence on compliance with feed standards.
Research limitations/implications
These findings indicate that regulators should invest more in awareness creation campaigns to enhance compliance with feed standards at the same time as feed processors should develop closer knowledge and learning links to farmers.
Originality/value
The findings of the study are expected to positively contribute to performance of chicken industry in Tanzania by promoting production of products that are of quality accepted domestically and abroad.
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The purpose of this paper is to provide an extension of a previous study by the author into compliance by Islamic banks in Bahrain with accounting standards issued by the…
Abstract
Purpose
The purpose of this paper is to provide an extension of a previous study by the author into compliance by Islamic banks in Bahrain with accounting standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
Design/methodology/approach
A number of compliance indexes are constructed to better understand compliance by the sample banks. The use of multiple indexes addresses methodological shortcomings identified in the previous study.
Findings
Compliance is found to be higher for some Islamic issues than for others. In a relative sense, compliance is found to be similar to that for the region with standards issued by the International Accounting Standards Board.
Research limitations/implications
The sample is limited to Islamic financial institutions in Bahrain. This is necessitated by the lack of adaptation elsewhere. The relatively high compliance found in Bahrain suggests broader adoption would be successful and would contribute to the overall regulation of the Islamic financial sector.
Originality/value
The AAOIFI has existed for over 20 years, but little empirical research had been conducted into compliance with the standards developed by this body. This paper, along with the previous study by the author, helps address this gap.
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Baah Prince Annor, Akwasi Mensah-Bonsu and John Baptist D. Jatoe
The purpose of this paper is to assess the adherence, constraints and key factors associated with smallholder pineapple farmers’ compliance with Global working group for Good…
Abstract
Purpose
The purpose of this paper is to assess the adherence, constraints and key factors associated with smallholder pineapple farmers’ compliance with Global working group for Good Agricultural Practice (GLOBALGAP) standards in the Akuapem-South Municipal area, Ghana. It utilizes the modeling of socio-economic, farm, market and institutional factors influencing smallholder farmers’ compliance with GLOBALGAP standards. This paper aims to enhance smallholder farmers’ compliance with food safety standards in particular GLOBALGAP so they can continue to participate in international food trade.
Design/methodology/approach
The study uses mainly primary data solicited from 150 randomly selected smallholder farmers. Descriptive statistics are employed in estimating compliant farmers’ rate of adherence with standards requirements and identifying constraints of farmers while a probit regression model is used to determine the factors influencing GLOBALGAP compliance decision of farmers.
Findings
Findings of the study show that compliant farmers’ rate of adherence with the standard is about 90 percent and this is below the minor musts compliance criteria of 95 percent. The results also indicate that lack of access to farm credits, high cost of farm inputs and high cost of labor are the major constraints to GLOBALGAP compliance. Factors found to positively influence farmers’ compliance decision are number of pineapple farms, access to off-farm income, access to market information and extension services. However, compliance is negatively influenced by age.
Research limitations/implications
Majority of Ghanaian smallholder pineapple farmers are not GLOBALGAP certified. The study was limited to Akuapem-South because most farmers produce pineapple for the export market and are certified under the Option II GLOBALGAP group certification.
Originality/value
This paper brings to bear issues confronting food safety standards compliance among smallholder farmers in developing countries, particularly Ghana.
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Ioannis Tsalavoutas, Lisa Evans and Mike Smith
The purpose of this research is to highlight the differences, and implications of any differences, between two approaches to measuring compliance with International Financial…
Abstract
Purpose
The purpose of this research is to highlight the differences, and implications of any differences, between two approaches to measuring compliance with International Financial Reporting Standards (IFRS) mandatory disclosure requirements: the commonly used “dichotomous” approach; and the alternative, but rarely used, partial compliance unweighted approach. The former gives equal weight to the individual items required to be disclosed by all standards. The latter assumes that each standard is of equal importance and consequently gives equal weight to each standard.
Design/methodology/approach
The paper employs both methods on a sample of companies. We then compare the results deriving from the application of the two methods and statistically test their differences.
Findings
It is found that the two methods produce significantly different overall and relative (i.e. ranking order) compliance scores.
Practical implications
This paper should alert researchers to the implications of using either method. Additionally, it highlights the need for academics and/or practitioners to be cautious when interpreting the findings of prior studies on compliance with IFRS mandatory disclosure requirements. Since the two methods produce significantly different compliance scores, findings regarding the variables associated with compliance may differ, depending on the disclosure index method followed. The paper suggests that simultaneous application of both methods would result in more robust findings in future research.
Originality/value
This is the first study to compare the results produced by applying both methods and statistically test their differences. The research methods explored are in particular relevant for policy‐oriented, international accounting research.
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