Determinan Pengungkapan Islamic Social Reporting (Isr) Pada Perusahaan Di Jakarta Islamic Index (Jii)

Abstract

This study empirically analyzes the factors affecting Islamic Social Reporting (ISR), including profitability, liquidity, industry type, board of commissioner size, and company size. ISR, based on its category, is measured using ISR Index assessed from the companies’ annual report. The populations are all companies listed in Jakarta Islamic Index (JII) in 2017-2019. The samples include 17 companies selected through purposive sampling method, and are analyzed by multiple regression method. The results of this study indicate that the type of industry and company size have a significant effect on ISR; whilst, the profitability, liquidity, and board of commissioner size have no significant effect on ISR because manufacturing industry tends to be wider in disclosing its social responsibility reports, and this is also the case with large companies. This may be because the larger the size of the company, the larger the stakeholder community that must be served. Furthermore, profitability, liquidity, and the size of the board of commissioners have no significant effect on ISR because the company's orientation may be purely on profit or other financial aspects and the quality of ISR is not determined mainly by the quantity of the board of commissioners but may be caused by the quality or diversity of its members.

Do Good Governance Business Sharia, Innovation and Financial Performance Affect Islamic Social Reporting Quality?

“…The data shows a small average ROA value of 0.03 or 3% compared to an average ISR value of 0.13 or 13%. The company's very small average ROA value is the reason for changing the company's focus scheme not to increase the quality value of social Islamic disclosure (ISR), but to allow for a focus on other quality disclosures such as financial aspects (Lestari, 2013;Prihatiningtias, 2022). Another possibility is that the company will focus more on increasing ROA, if social disclosure requires expensive costs, and it is not company-centric in increasing its profits.…”

The Effect of Sharia Supervisory Board Characteristics and Sharia Compliance on Islamic Social Reporting Disclosure (Financial Performance as a Moderating Variable)

“…In addition, companies that adhere to sharia principles should have a higher level of awareness in providing information to Muslim stakeholders. The absence of an increase in the ISR index could be an indication that the company is not doing enough evaluation to improve its business in providing information regarding its operational activities using sharia principles to parties who need it (Prihatiningtias et al, 2022).…”