An institutional perspective for research inwaqfaccounting and reporting

Abstract

Purpose This paper aims to improve the understanding of the institutional pressures that shape the intention to adopt waqf accounting and reporting. The study seeks to answer two research questions as follows: what are the challenges in the adoption of waqf accounting and reporting in waqf institutions; and how do institutional pressures influence the adoption of waqf reporting in Malaysia. Drawing on the work of DiMaggio and Powell and Scott of institutional theory, this paper provides empirical evidence of institutional pressures on the adoption of waqf reporting in Malaysia and the challenges faced in adopting waqf accounting and reporting. Design/methodology/approach This study uses qualitative research method with an explanatory case study approach. Data are collected through semi-structured interviews with the accountants of State Islamic Religious Council and Customs of Terengganu, an informal conversation with the Deputy Director of Accountant Generals Department of Malaysia and document reviews, mainly the Malaysian Accounting Standard Board Research paper. Findings The findings show that coercive pressure such as government regulation contributes to challenges in the adoption of waqf accounting and reporting. Normative pressures contribute to challenges in formulating standardised waqf accounting and reporting, whereas mimetic pressure contributes to challenges in the comparability of the waqf accounting and reporting among the state Islamic religious councils in Malaysia. In the efforts towards the standardisation of waqf accounting and reporting practice, a similarity of the process of the standard implementation or the institutional isomorphism of the State Islamic Religious Council in Terengganu is strongly influenced from the result of the mandate of its Board members and Fatwa council members (coercive isomorphism and religion logic) and minor influence from the normative isomorphism (the result of the participants’ education and profession) as well as the result of imitating other State of Islamic Religious Councils (SIRCs) because of the ambiguity of the process or certain practice. Research limitations/implications The study contributes to the knowledge by extending institutional theory and the possible role of religion logic in Islamic perspective to organisational behaviour and accounting development in SIRCs. This study is limited to the understanding of the challenges in the adoption of waqf accounting and reporting but could also be applicable to the adoption of other accounting standards or regulations. Practical implications This paper offers key implications for research, in improving the understanding of contextual factors and decision to adopt waqf accounting and reporting. The standard setter needs to be aware of the influence of contextual factors that shape decision towards standardisation of accounting and reporting for waqf. Originality/value The interplay of institutional pressures and implications of religion logic provides an interesting approach to understanding the waqf institutions’ intention to adopt accounting and reporting for waqf.

Predicting Islamic Finance Adoption Behavior by MSMEs: Institutional Theory Approach

“…Of course, there is no direct confirmation from previous studies of this study's results, but several studies in the area of financial system adoption behavior by MSMEs have supported these findings, such as Chathurangani and Hemathilake (2019), Damak-Ayadi et al (2020), andSadress et al (2019). The findings of this study are also supported by the results of studies in Islamic finance, such as Bukhari et al (2020) and Talib et al (2020).…”

“…This internal encouragement can come from personnel with a positive experience in using Islamic financial products and services, whether from their educational background, training, or previous work experience in other organizations. Previous studies have also supported evidence that normative pressure had a significant influence on various adoption behaviors, namely in the context of MSMEs (Caldera et al, 2019;Damak-Ayadi et al, 2020;Raghavan et al, 2018;Sadress et al, 2019) and in the context of Islamic business and finance (Bashir, 2019a;Talib et al, 2020). Therefore, normative pressure should be suspected as a direct antecedent of the behavior of MSMEs to adopt Islamic financial products and services.…”

“…Coercive pressure is thought to have a significant role in the behavior of MSMEs in adopting Islamic finance. Several previous studies have also provided the support that coercive pressure had a significant influence on various adoption behaviors, namely in the context of MSMEs (Caldera et al, 2019;Damak-Ayadi et al, 2020;Raghavan et al, 2018;Sadress et al, 2019;Shibin et al, 2020) and in the context of Islamic business and finance (Bashir, 2019a;Bukhari et al, 2020;Talib et al, 2020). Therefore, against this coercive pressure, the following hypothesis could be formulated:…”

“…This situation will encourage MSMEs to carry out a mimetic process by imitating MSMEs or other organizations to meet the needs of these financial products and services. Mimetic mechanisms have also been shown to have a significant role in some adoption behaviors, both in the context of MSMEs as in a study by Bakr and Napier (2020), Sadress et al (2019), Caldera et al (2019), Masocha and Fatoki (2018), and Raghavan et al (2018), as well as in the context of Islamic business and finance, as researched by Bashir (2019a) and Talib et al (2020). Therefore, the following hypothesis could be formulated:…”

Accounting for Waqf Institutions: Business, Not-for-Profit or Hybrid Entities?

“…Moreover, Talib et al (2020) sought to explore the understanding of the effects of institutional pressures on the intention to apply accounting and reporting by waqf institutions in Malaysia. The data were generated through semi-structured interviews and documentary reviews.…”