Islamic Corporate Reports

Abstract

This article develops a theory about the form and the content of the financial information that should be contained in Islamic financial statements. The theory suggests that the presence of the Islamic religion as a cultural variable affects the way certain accounting measures are interpreted and the manner in which accounting information should be disclosed. Two important criteria for disclosure in Islamic accounting are identified: a form of social accountability and a rule of full disclosure. This leads to a modification of the form of the conventional Western set of financial statements, which are referred to in the paper as Islamic corporate reports (ICRs). The specific recommendations are that ICRs should contain a value-added statement as the focus of performance of the accounting entity and a current value balance sheet in addition to the historic cost balance sheet. It is argued that ICRs, extended in this way, would better serve the needs of users wishing to act in accordance with the Islamic code.

The Effect of Financial Performance and Environmental Performance on Firm Value with Islamic Social Reporting (ISR) Disclosure as Intervening Variable in Companies Listed at Jakarta Islamic Index (JII)

“…This index is the development of the CSR disclosure and match with the shariah principles. The concept of ISR is getting better because of the prior studies on it which discussed the importance of ISR for the Muslim decision makers [4]; [9]; [13] In ISR, the stress on social justice goes beyond reporting the environment, minority interests and employees. It concerns with issues related to the well-being of the society pertaining to interest and unfair trading practices such as income distribution or zakat (Othman et al 2009).…”

The Influence of CSR Practices on Financial Performance: Evidence From Islamic Financial Institutions in Indonesia

“…The specific recommendations are that ICRs should contain a value-added statement as the focus of performance of the accounting entity and a current value balance sheet in addition to the historic cost balance sheet. It is argued that ICRs, extended in this way, would better serve the needs of users wishing to act in accordance with the Islamic code (Baydoun & Willett, 2000).…”

Corporate Social Responsibility Disclosure (A Comparison between Islamic and Conventional Financial Institutions in Bahawalpur Region)

“…All organizations have right to follow their personal interest and objectives related to social surroundings (William, 1999). To gain the trust of people, Islamic banks should follow Shari"ah (Baydoun and Willett, 2000). Stakeholders, political economy and authorities define that companies and individuals are linked with society (Ramanahthan, 1976;Deegan, 2002;William, 1999).…”

“…Therefore, organizations should be aware that either they are working under social values or not (Deegan, 2002). CSR is related to organization"s action for the prosperity of society (Bowman and Haire, 1976). Financer and managers are responsible for all business activities (Lewis, 2001 (Sadeghzadeh, 1995).…”