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Book part
Publication date: 1 March 2021

Siti Khomsatun, Hilda Rossieta, Fitriany Fitriany and Mustafa Edwin Nasution

The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may…

Abstract

The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may increase bank soundness. This study aims to investigate the relationship of sharia disclosure and Sharia Supervisory Board in influencing Islamic bank soundness in the different regulatory framework of the country. Using purposive sampling, the research covered 84 Islamic banks in 16 countries during the period 2013–2015 with lag data of Islamic bank soundness. The result shows sharia disclosure influences on Islamic bank soundness for management efficiency, capital adequacy ratio, asset quality, and liquidity. The results also show that sharia disclosure mediates the indirect effect of SSB on Islamic bank soundness. The regulatory framework (sharia accounting standard and SSB regulation) shows moderating effect of regulation framework proved on the association of sharia disclosure with management efficiency, capital, and liquidity. The effect is indirectly depending on the regulatory framework for proxy management efficiency, capital, and liquidity. The implication of the research suggests that sharia disclosure could increase the market discipline mechanism of Islamic bank stream. The Islamic bank can increase the transparency using sharia disclosure as a branding for increasing public trust, even though in the deficient Islamic bank regulation countries.

Details

Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics
Type: Book
ISBN: 978-1-83867-359-8

Keywords

Article
Publication date: 1 September 2023

Yunice Karina Tumewang, Indri Supriani, Herlina Rahmawati Dewi and Md. Kausar Alam

This study aims to identify the significant scientific actors, reveal the intellectual structure and explore essential features for future research direction in Sharia governance…

Abstract

Purpose

This study aims to identify the significant scientific actors, reveal the intellectual structure and explore essential features for future research direction in Sharia governance studies.

Design/methodology/approach

The study applies a hybrid review combining bibliometric analysis and content analysis. It uses Rstudio (biblioshiny), VOSviewer and Microsoft Excel to analyze 457 articles published in 206 journals indexed by Scopus and/or Web of Science during the period of 1985 until the end of 2022.

Findings

The paper discovered four distinct streams of Sharia governance studies: structure of Sharia governance, Sharia governance and risk management, Sharia governance and sustainability and the effect of Sharia governance toward firm’s financial performance. Furthermore, it derives and summarizes 26 main research questions for future studies.

Research limitations/implications

In terms of theoretical implications, the finding contributes to the general literature on Sharia governance by conducting bibliometric analysis and content analysis. In terms of practical implications, this study suggests that Sharia governance should be strengthened by the management of Islamic banks and other Islamic-based businesses.

Originality/value

To the best of the authors’ knowledge, this study is among the early studies using a hybrid review on the topic of Sharia governance, allowing future researchers in this field to capture the trends and progress of current literature as well as the research gaps to be filled in by future researchers.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 22 July 2020

Duha Farouq Khmous and Mustafa Besim

This study aims to investigate how the Islamic banking share (percentage of total Islamic banking assets relative to total banking sector assets) and individual characteristics…

Abstract

Purpose

This study aims to investigate how the Islamic banking share (percentage of total Islamic banking assets relative to total banking sector assets) and individual characteristics (gender, age, income and education) affect financial inclusion in 14 Middle Eastern and North African (MENA) countries with different income levels.

Design/methodology/approach

This study uses data from the 2014 World Bank Global Findex database to analyze the impact of individual characteristics, Islamic banking share and countries’ developmental levels on financial inclusion and its barriers in MENA countries. The probit estimation method is used for estimations.

Findings

The findings indicate that financial inclusion, particularly in middle-income MENA countries, is lower than the global average. While being male, rich and older positively affects financial inclusion in these countries, education does not. Islamic banking practises also contribute to financial inclusion, especially for individuals with strong religious affiliations. The effect of Islamic banking on financial inclusion is found to be greater in middle-income MENA countries.

Practical implications

Islamic banking institutions could play a greater role in promoting financial inclusion in the MENA region by offering Sharia-compliant products that meet individuals’ needs, matching the specific requirements and status of each country with affordable costs and offering adequate information to customers. Governments should promote more Islamic banking and incentivise investments in technology, which helps expand financial inclusion.

Originality/value

This is the first study to examine the influence of Islamic banking share and countries’ levels of development on financial inclusion in the MENA region.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 13 no. 4
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 27 July 2021

Prem W. Senarath Yapa

The purpose of this paper to systematically review and critique research on professional accounting development published in English during the last two-and-a-half decades. This…

Abstract

Purpose

The purpose of this paper to systematically review and critique research on professional accounting development published in English during the last two-and-a-half decades. This paper focusses on developing countries (DCs) and suggests a future research agenda. In recent decades, many DCs have undergone reforms in the professionalisation of accounting (PA).

Design/methodology/approach

Extant research articles are selected from major accounting journals between 1995 and 2020 for the review. A conceptual analysis of the selected literature is presented to evaluate the focus and scope of existing work.

Findings

Previous empirical research on DCs has focused on the state and political ideology, religion and Sharia law, racial/class discrimination, colonialism and closure (e.g. the monopolisation of accounting work). Also, a complex set of globalisation, political, economic, and social contexts. In particular, a strong tradition of British accounting associations providing accounting qualifications in DCs is noted. Future research should aim to examine such issues as the politics of decolonisation, domination, neoliberalism, competition from Western professional associations, accounting in state-owned organisations, government accounting reforms, and social and environmental accounting issues.

Research limitations/implications

This paper covers only PA research in high-ranked English language accounting journals and chapters of a monograph. Accounting research published in other languages and lower-ranked journals could be imperative sources as well but not included in this study.

Originality/value

While PA has been explored in a variety of locations and from different perspectives in Western countries, a review in DCs was lacking.

Details

Accounting, Auditing & Accountability Journal, vol. 35 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 20 September 2023

Abdelhafid Benamraoui, Tantawy Moussa and Mostafa Hussien Alsohagy

This paper aims to investigate the disparity and compliance of information disclosures in Islamic banks (IBs). Specifically, the research examines IBs’ compliance with Sharia

Abstract

Purpose

This paper aims to investigate the disparity and compliance of information disclosures in Islamic banks (IBs). Specifically, the research examines IBs’ compliance with Sharia disclosure requirements.

Design/methodology/approach

To determine the extent of disclosures and compliance with Islamic business principles, content analysis is applied to the annual reports of a sample of IBs from 11 countries. A comprehensive reporting framework has also been developed to assess the transparency and compliance of IBs with Islamic business principles. Institutional theory and core Islamic principles are used to inform the study and its findings.

Findings

The results reveal that IBs demonstrate limited transparency on the key Sharia compliance issues, and there is a wide variation in the level of reporting across the countries studied. Moreover, the authors find that IBs located in the single integrated regulatory framework (RF) countries disclose more information, followed by those located in dual RF countries and then those located in Islamic RF countries.

Originality/value

This study presents a unique and comprehensive framework to assess the areas of Sharia disclosure by IBs and provides a conceptual rationing for the actual level of IBs’ Sharia reporting. This study also fills a significant gap in the literature, as most studies in this field are based on a single-country study. The results are deemed of direct relevance to IBs’ managers, investors, policymakers, regulators and the wider public, particularly in the Muslim world.

Details

Accounting Research Journal, vol. 36 no. 4/5
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 19 June 2009

Christos Alexakis and Alexandros Tsikouras

The purpose of this paper is to provide an overview of the regulatory framework and key regulatory institutions and industry associations in Islamic finance today and highlight…

12293

Abstract

Purpose

The purpose of this paper is to provide an overview of the regulatory framework and key regulatory institutions and industry associations in Islamic finance today and highlight areas that merit increased attention.

Design/methodology/approach

A wide range of bibliography was reviewed, with particular focus on the standards published by the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions. Regulatory topics of particular interest in the Islamic financial world are reviewed. An overview of the main Islamic regulatory institutions is provided. The paper ends with a set of hypotheses requiring further research.

Findings

The paper finds that the growth of the Islamic finance sector may be impacted by the: increased involvement in Islamic finance by Western regulators, as well as credit rating agencies; existence of sound accounting procedures; increased protection of stakeholders of Islamic Financial Institutions.

Originality/value

This paper provides useful information on the current status of the regulatory framework in Islamic finance and highlights areas for further research for academics and professionals alike.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 2 no. 2
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 30 October 2023

Yusuf Karbhari, Abdelhafid Benamraoui and Ahmad Fahmi Sheikh Hassan

The study applies Erving Goffman's (1974) “frame analysis” principles to examine how Sharia governance is practiced in Islamic banks and explores the interaction and strategies…

Abstract

Purpose

The study applies Erving Goffman's (1974) “frame analysis” principles to examine how Sharia governance is practiced in Islamic banks and explores the interaction and strategies adopted by bank managers to influence the decisions of Sharia scholars. The study also aims to identify inherent flaws in the Sharia compliance review system.

Design/methodology/approach

The study employs the principles of Goffman as a lens to critically analyse a rich dataset obtained through interviews undertaken with 46 key players operating in the governance framework of the Malaysian Islamic banking industry due to its progressive Islamic governance framework.

Findings

The study demonstrates that managers of Islamic banks may engage in “passing” and “covering” strategies while interacting within the governance structure. Concurrently, Sharia boards (SBs) implement “protective practices” during their interactions, adding complexity to their responsibilities within the banks. Consequently, SBs cannot merely be viewed as instruments for legitimising banking operations. This raises questions about the “impression management,” “concealment” and “competence” strategies employed by managers and SB members, as suggested by Goffman's framework. These findings indicate that there is room for further enhancement in the governance practices of Islamic banks.

Research limitations/implications

Future research could explore aspects related to the governance of Islamic banks, such as investigating the independence and effectiveness of internal Sharia officers. Examining the strategies employed during their interactions with external Sharia boards and other stakeholders could provide further valuable insights.

Practical implications

By highlighting shortcomings in the governance and compliance review process, the findings could serve as a valuable resource for policymakers. The insights derived could inform the development of regulations aimed at reducing opportunistic behaviour and promoting accountability in the Islamic banking sector.

Originality/value

This study uniquely employs Goffman's concepts of “frontstage” and “backstage” strategies to offer insights into the interactions between Islamic bank managers and SBs and the impact of these interactions on Sharia compliance. The study contributes to the understanding of the dynamics between key players in the governance of Islamic banks and the factors influencing their adherence to Sharia principles.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 10 May 2022

Ahmad Abras and Kelum Jayasinghe

This paper examines the historical evolvement of competing institutional logics (i.e. religion, profession, state, market and community) underpinning Islamic accounting…

Abstract

Purpose

This paper examines the historical evolvement of competing institutional logics (i.e. religion, profession, state, market and community) underpinning Islamic accounting standardisation projects and power relations between internal actors representing these logics.

Design/methodology/approach

The paper adopts a case-study approach and analyses two Islamic accounting standardisation projects implemented at the national and international levels. Documentary review and semi-structured interviews are used for data collection. Analysis is informed by the “Institutional Logics Perspective” and Bourdieu's notion of “power as capital in a field”.

Findings

Research findings illustrate how some local actors pre-dispose themselves in promoting strict compliance to IFRS, while others endeavour to ensure compliance to “Islamic Sharia requirements” in financial reporting. In this power dynamic, there is an ongoing “constructive resistance” actively exerted by the latter group against the former, preserving the existence of religion-based reporting demands in Islamic accounting standardisation approaches. The paper also highlights chronological “dynamic” accounts that explain the evolvement of institutional logics prevailing in these projects over different historical stages at both national and international levels.

Originality/value

This paper's findings contrast and challenge the existing assumption that the “epistemic community” promoting IFRS agenda always faces “passive responses” from local actors. Moreover, the paper's offering of a dynamic view to institutional logic mapping extends the previously used “static analyses” of logics prevailing in Islamic accounting standardisation projects.

Details

Accounting, Auditing & Accountability Journal, vol. 36 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 20 July 2023

Yunice Karina Tumewang, Herlina Rahmawati Dewi and Hanudin Amin

The purpose of this paper is to build a relationship between the quantitative and structural indicators of maqashid sharia studies produced from bibliometric analysis and the…

Abstract

Purpose

The purpose of this paper is to build a relationship between the quantitative and structural indicators of maqashid sharia studies produced from bibliometric analysis and the conceptual discussion developed through a thorough review of selected key literature.

Design/methodology/approach

The study uses bibliometric analysis, collecting information drawn from 219 articles published in 68 journals during the period of 2006–2022. This study uses VOSviewer, RStudio, Microsoft Excel, and an examination of research time periods using the Scopus database to illustrate the citation analysis and keyword map. It is also strengthened by content analysis of selected studies.

Findings

The main research theme found in this study is the application of maqashid sharia in Islamic banks, with Islamic banks and Islamic finance among the most frequently used keywords. Meanwhile, the geographical spread of maqashid sharia research has reflected its universal acceptance, as it has spread across both Muslim-dominant and non-Muslim-dominant countries. Besides, maqashid sharia is found to be an extremely important subject for ensuring the ethical dimension of Islamic finance products and services, a more inclusive human development index, and contributing to the international agenda of Sustainable Development Goals. Lastly, future research is expected to broaden it into a multi-dimensional horizon, with several recommendations offered to enrich the understanding of maqashid sharia.

Practical implications

The findings of this study can be beneficial to multiple stakeholders in Islamic finance industry, including the management of Islamic banks, who can enhance the values of maqashid sharia in designing their products/services, and the regulators, who can formulate regulatory frameworks which are reflective of maqashid sharia principles.

Social implications

This study will assist future scholars in this field to formulate and design exciting research ideas and models to address the deficiencies found in the current implementation of maqashid sharia within Islamic finance industry.

Originality/value

The primary contribution of this study is to provide comprehensive review and discussion of selected significant literature on maqashid sharia and give direction for future research. In addition, this study also extends and incorporates the results of bibliometrics using the recent maqashid sharia studies published at the end of 2022.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 8 May 2018

Muhammad Tariq Majeed and Abida Zainab

Islamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h particularly in…

Abstract

Purpose

Islamic banks provide an alternative financial system based on Sharia’h (Islamic law). However, critics argue that operation at Islamic banks is violating Sharia’h particularly in terms of provision of interest free services, risk sharing and legal contract. The purpose of this paper is to empirically evaluate the Sharia’h practice at Islamic banks in Pakistan by considering some basic principles of Sharia’h.

Design/methodology/approach

Primary data are collected from 63 branches of Islamic banks in Pakistan. Questionnaire is used as an instrument. The study uses structural equation modeling that includes confirmatory factor analysis and regression analysis. Data are codified and analyzed using SPSS and Amos.

Findings

This study finds that Islamic banks are providing interest free services, ensuring that transactions and contracts offered by Islamic banks are legal and offering conflict-free environment to customers. In contrast, estimated results expose that Islamic banks are not sharing risk and Sharia’h supervisory board is not performing its role perfectly. Similarly, it is found that organization and distribution of zakat and qard-ul-hassan are weak at Islamic banks.

Research limitations/implications

Data are collected from Islamabad federal capital of Pakistan that hold just 5 per cent share of Islamic banking industry. This small share may not provide true picture of Islamic banking sector.

Practical implications

To ensure risk sharing, Islamic banking industry must consider the development of new modes of financing and innovation of more products based on Sharia’h. State Bank of Pakistan should ensure separate regulatory framework that enable Islamic banks to provide qard-ul-hassan, organize and allocate zakat.

Originality/value

This paper discusses the perception of bankers, who are actually the executors, about Shariah’s practices at Islamic banks in Pakistan. There are not many discussions on this topic that could be found, and hence this could be considered as a significant contribution by this paper to the existing literature of Islamic finance.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

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