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1 – 10 of 38Muhammad Iqmal Hisham Kamaruddin, Mustafa Mohd Hanefah and Rosnia Masruki
This study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good…
Abstract
Purpose
This study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good waqf reporting practices.
Design/methodology/approach
A series of interviews with four waqf officers who are involved with waqf reporting process from four different waqf institutions in Malaysia were conducted.
Findings
The findings show a number of reasons for the current weak waqf reporting practices including the absence of standardised waqf reporting standards, no reporting or disclosure awareness by the waqf management, limited reporting channels from the state authorities to the national authorities, diversification in the governance structure and reluctance of waqf administration to disclose waqf reporting. The findings also identified several factors contributing to good waqf reporting practices. This includes leadership, good cultural setting within the institution, political will as a push factor, limited qualified personnel as well as sustainability issues and finally, the visibility of the waqf report itself.
Practical implications
The study findings and recommendations are useful for the State Islamic Religious Councils and waqf institutions in Malaysia to enhance the waqf reporting practices in Malaysia.
Originality/value
This study is among the few studies that identify the reasons and factors affecting the good waqf reporting practices in Malaysia.
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Mustafa Mohd Hanefah, Muhammad Iqmal Hisham Kamaruddin, Supiah Salleh, Zurina Shafii and Nurazalia Zakaria
The existence of internal control for Sharīʿah-compliance promotes reasonable assurance that the Islamic financial institution’s (IFI’s) objectives are achieved in the following…
Abstract
Purpose
The existence of internal control for Sharīʿah-compliance promotes reasonable assurance that the Islamic financial institution’s (IFI’s) objectives are achieved in the following categories, namely, the effectiveness and efficiency of operations, the reliability of financial reporting and the level of compliance with applicable laws and regulations, as well as accounting and auditing standards. Sharīʿah non-compliant income (SNCI) is an important issue in IFIs’ operations. Thus, the purpose of this paper is to identify issues related to governance and internal control of SNCI in selected IFIs in Malaysia.
Design/methodology/approach
This research uses a case study approach to gather data on the measures of governance and risk management in relation to the internal control for SNCI in IFIs. Interviews were conducted with officers of the Sharīʿah and internal audit departments on internal control practices regarding SNCI.
Findings
Regulator’s guidelines on SNCI are simple and brief, lacking rigour in terms of governance, risk management and audit procedures. The section on SNCI is only a brief statement within the Bank Negara Malaysia’s Guidelines on Financial Reporting for Islamic Banking Institutions and also in the Operational Risk Integrated Online Network system operated by IFIs. Most of the respondents in the interviews suggested that there should be a proper guideline in determining the classification of SNCI. Second, although IFIs have established the purification account to manage SNCI, the real practice varies from one IFI to another. Third, although there are supposedly documented procedures established in relation to management and administration of SNCI, the following events still occur in practice, namely, no authorisation from the Sharīʿah Committee (SC) on various types of income channelled to the SNCI account; unauthorised use of SNCI for other purposes; SNCI not being reported in the annual financial reports; and distribution of SNCI prior to obtaining the SC’s consent. Fourth, there is an absence of Sharīʿah risk assessment conducted on operational risk by IFIs to identify any potential Sharīʿah non-compliant event.
Research limitations/implications
This research contributes to the importance of Islamic corporate governance theory and Sharīʿah risk management, as well as strengthening the case for reporting SNCI to shareholders. It also contributes to the body of knowledge on the capability of the management in managing the internal control system of IFIs’ SNCI.
Originality/value
A new internal control assessment matrix is proposed for Sharīʿah-compliance in IFIs.
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Muhammad Iqmal Hisham Kamaruddin, Zurina Shafii, Mustafa Mohammed Hanefah, Supiah Salleh and Nurazalia Zakaria
This study aims to explore the current Shariah audit practices in zakat and waqf institutions in Malaysia.
Abstract
Purpose
This study aims to explore the current Shariah audit practices in zakat and waqf institutions in Malaysia.
Design/methodology/approach
A focus group discussion (FGD) with 38 zakat and waqf officers from 17 different zakat and waqf institutions in Malaysia was conducted. For reporting purposes, this study used a single-case study approach. The FGD was conducted and completed at the end of June 2021 via an online approach through Microsoft Teams.
Findings
The finding highlights the existing Shariah governance practices especially in terms of Shariah supervision roles, Shariah audit implementation in terms of Shariah audit scopes and common findings, Shariah audit competency, Shariah audit effectiveness especially the need for external Shariah audit function and Shariah audit issues and challenges faced in the implementation of Shariah audit practices.
Practical implications
The study findings and recommendations are useful for zakat and waqf institutions as well as the State Islamic Religious Councils to enhance Shariah audit practices in Malaysia.
Originality/value
This study is among the pioneer studies that explore Shariah audit practices in zakat and waqf institutions in Malaysia.
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Khaled Ali Endaya and Mustafa Mohd Hanefah
The purpose of this paper is to investigate the direct relationship between internal auditor’s characteristics[1] and internal audit effectiveness[2], and the moderating effect of…
Abstract
Purpose
The purpose of this paper is to investigate the direct relationship between internal auditor’s characteristics[1] and internal audit effectiveness[2], and the moderating effect of senior management[3] support.
Design/methodology/approach
Standard multiple regression and moderated multiple regression are applied, and the data were collected from 114 members of Libyan Association of Accountants and Auditors[4] by using personally administered questionnaire.
Findings
The findings reveal that internal auditor’s characteristics have a significant impact on internal audit effectiveness, and senior management support has a moderating effect.
Practical implications
The findings would encourage Libyan organizations to concentrate on the issue of internal audit effectiveness, and will strengthen the capacity of internal auditing in public organizations.
Originality/value
This paper contributes to the literature of both internal audit and management studies and represents the first effort to examine the impact of internal auditor’s characteristics on internal audit effectiveness with senior management support as a moderating variable.
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Muhammad Iqmal Hisham Kamaruddin and Mustafa Mohd Hanefah
This study aims to explore and identify potential challenges and prospects for conducting the professional shariah audit training programme via an e-learning approach during…
Abstract
Purpose
This study aims to explore and identify potential challenges and prospects for conducting the professional shariah audit training programme via an e-learning approach during coronavirus disease 2019 (COVID-19).
Design/methodology/approach
Questionnaires were administered to 296 participants who were enrolled in the professional shariah audit training programme via e-learning during the COVID-19 pandemic outbreak in 2020. These participants were final-year students from selected Malaysian public universities.
Findings
Findings show that several main challenges are faced in adopting an e-learning approach for conducting the professional shariah audit training programme such as the inability to do more hands-on, group and physical activities, different understandings based on academic backgrounds, difficulty in learning practical and technical topics, technical issues and problems during e-learning sessions. These lead to the unsuitability of conducting professional training via the e-learning approach. In terms of prospects of knowledge learnt via the e-learning approach, participants showed that they are able to master all six modules covered in the professional shariah audit training programme via the e-learning approach. These include (1) shariah principles; (2) shariah governance; (3) Islamic financial transactions; (4) shariah risk management; (5) shariah audit planning and programme; and (6) shariah audit fieldwork and communication.
Practical implications
Based on the findings, it is suggested to have more time spent and earlier preparation on the learning contents and sessions, more discussion on actual contents and practical exercises and competency of the trainers in delivering e-learning sessions.
Originality/value
This study is believed to be one among the pioneering studies on the potential challenges and prospects in adopting e-learning for conducting the professional shariah audit training programme due to COVID-19.
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Monther Eldaia, Mustafa Hanefah and Ainulashikin Marzuki
The purpose of this study is to examine the effect of Board of Directors Effectiveness (BODE) on the performance of Malaysian Takaful companies licensed by the Central Bank of…
Abstract
Purpose
The purpose of this study is to examine the effect of Board of Directors Effectiveness (BODE) on the performance of Malaysian Takaful companies licensed by the Central Bank of Malaysia. In addition, the study investigates the moderating effect of Shariah Committee Quality (SCQ) on the relationship between BODE and companies’ performance.
Design/methodology/approach
This study uses a sample of 11 Malaysian Takaful companies during the period of 2010-2017. While BDE and SCQ are measured using indices, performance is proxied using ROA and ROE. A panel fixed effect regression analysis is used to test the impact of the BDE on the financial performance of Malaysian Takaful companies and the moderator role of SCQ.
Findings
The main finding of this study shows a positive association between BDE and performance. More specifically, boards with a high presence of independent, Muslim and female directors positively contribute to the performance of Malaysian Takaful companies. Another interesting finding is related to the positive moderating effect of SCQ on the relationship between BDE and performance. This result indicates that a high level of SCQ combined with a high level of board effectiveness improve performance.
Practical implications
The finding is of great importance to stakeholders and policymakers to improve their board effectiveness and the quality of the Shariah committee to reduce agency costs and to improve the performance of Malaysian Takaful companies.
Originality/value
This study adds to the prior literature by investigating for the first time the relationship between BDE and performance and the interaction effect of SCQ on the performance of Malaysian Takaful companies.
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Muhammad Iqmal Hisham Kamaruddin and Mustafa Mohd Hanefah
This study aims to examine and compare the current waqf governance practices in waqf institutions in Malaysia.
Abstract
Purpose
This study aims to examine and compare the current waqf governance practices in waqf institutions in Malaysia.
Design/methodology/approach
This paper reviews professional documents and literature to propose a new and practical waqf governance measurement. Waqf governance measurements were used to examine and compare the current waqf governance practices among waqf institutions in Malaysia. The annual reports of all waqf institutions under the State Islamic Religious Councils (SIRCs) were analysed using content analysis on the current waqf governance practices using binomial logic.
Findings
Overall, the results indicate moderate waqf governance practices under three waqf governance categories, namely waqf governance policy, waqf governance board and waqf governance processes. This study also found a significant impact of corporatisation reformation of waqf institutions on waqf governance practices.
Research limitations/implications
The findings indicate the need for all waqf institutions in Malaysia, especially for non-corporate waqf institutions, to enhance their waqf governance practices by disclosing all relevant information to the public. This is because the success of waqf fund management can be portrayed through the management’s transparency in waqf governance practices on how they deliver and use their resources to attain socio-economic objectives.
Originality/value
To the best of the authors’ knowledge, this study is among the first studies that examined and evaluated the current waqf governance practices in several waqf institutions in Malaysia.
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Abdul Hadi Ibrahim and Mustafa Mohd Hanefah
This study aims to investigate the impact of board diversity characteristics, namely, independence, gender, age and nationality of directors on the level of corporate social…
Abstract
Purpose
This study aims to investigate the impact of board diversity characteristics, namely, independence, gender, age and nationality of directors on the level of corporate social responsibility (CSR) disclosures.
Design/methodology/approach
Content analysis was used to determine CSR disclosure. This study used panel data analysis to investigate the influence of board diversity characteristics on CSR disclosures.
Findings
Panel data analysis show that the level of CSR disclosure has increased over the period of study. Results also reveal a positive and significant association between the level of CSR disclosure and board diversity variables.
Research limitations/implications
This study examined only companies listed on Amman Stock Exchange. Therefore, the generalisation of the results might be limited to the listed companies only.
Practical implications
Findings are relevant to policymakers, professional organisations and practitioners in Jordan and in other Arab countries.
Social implications
The role of women in the boardroom is important to ensure more CSR activities by the listed companies. Jordan being a Muslim country should take the initiative to introduce laws to increase the number of women to the board.
Originality/value
This study offers significant contributions to existing CSR literature in Jordan and in other Arab countries by introducing female directors. Findings are important to policymakers. They should implement quotas for women in the boardroom, and adopting such a policy will increase the participation of women in the decision-making process of the companies and reduce gender bias.
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Mustafa Mohd Hanefah and Samihah Hj. Ismail
Many researchers have debated the relevance of accounting curriculum to the employers in the US and other developed counries. Accounting graduates are said to lack various skills…
Abstract
Many researchers have debated the relevance of accounting curriculum to the employers in the US and other developed counries. Accounting graduates are said to lack various skills that are important in today’s job market. Among them are technological skills, oral and communication skills, and professional skills. This phenomenon is not only common in developed countries, but als in the developing countries like Malaysia. In Malaysia, graduates from local universities and colleges are facing unemployment due to the lack of such skills. Although the Malaysian economy is performing better than other countries in this region, yet the unemployment rate among graduates is still high.
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Adel Mohammed Sarea and Mustafa Mohd Hanefah
The objective of this paper is to determine the level of compliance with Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) accounting standards by…
Abstract
Purpose
The objective of this paper is to determine the level of compliance with Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) accounting standards by Islamic banks of Bahrain.
Design/methodology/approach
The paper is based on diffusion of innovation theory whereby the perceived relative advantage, compatibility, complexity, trialability and observability factors are expected to influence the level of compliance with AAOIFI accounting standards.
Findings
The findings indicate that Islamic banks of Bahrain are in full convergence with AAOIFI accounting standards.
Research limitations/implications
This research, just like many other studies, faces data limitations. Sample size employed for this study contains only the accountants in Islamic banks of Bahrain.
Originality/value
The results of this paper are expected to serve as a guide to the regulatory bodies and the setter of accounting standards for Islamic financial institutions (IFIs).
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