Level of Maqāsid ul-Shari’āh’s in financial reporting standards for Islamic financial institutions

Mukhlisin, Murniati

doi:10.1108/jiabr-03-2020-0090

Cited by 16 publications

(17 citation statements)

References 22 publications

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“…From an Islamic perspective, players are required to fulfill the religious obligation of trust (Amana) forcing them to behave with respect to justice (Adl), balance (Qist) and perfection (Ihsaan) principles (Beekun and Badawi, 2005). The key objectives of Islamic accountability is the fulfillment of obligations to God, society, the environment and the self as well as the achievement of success in this world and hereafter (Falah) (see Kamla, 2009;Abdul-Baki et al, 2013;Mukhlisin, 2016). With regards to IBs, the Islamic accountability theory therefore extends the moral accountability of IB players (managers, board of directors and SSB members) beyond their legal liability.…”

Section: Accounting Standards and Value Relevancementioning

confidence: 99%

Accounting standards and value relevance of accounting information: a comparative analysis between Islamic, conventional and hybrid banks

Agbodjo

Toumi

Hussainey

2020

JAAR

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PurposeThe purpose of this study is to investigate the value relevance of accounting information for Islamic, conventional and hybrid banks. It also investigates the moderation impact of IFRS adoption and AAOIFI mandatory adoption on value relevance of accounting information.Design/methodology/approachUsing value relevance models, The authors run panel data regressions on 47 Islamic banks, 112 conventional banks and 42 hybrid banks (conventional banks with Islamic windows). The study covers listed banks from 14 countries over the period 2010–2018.Findingspaper offers three empirical evidences. First, the authors find that value relevance of accounting information is higher for Islamic banks, compared to conventional banks. Second, the authors find that IFRS framework strengthens the relevance of accounting information in Islamic banks, but the authors did not find the same for hybrid banks. Third, the authors find that the mandatory adoption of AAOIFI accounting standards has a moderation effect on value relevance of accounting information for both Islamic banks and hybrid banks. The robustness analysis shows that there is a significant contribution of compliance with Islamic Finance rules in IBs and HBs, which substantially reduces managers' opportunistic behavior to manage accounting information.Research limitations/implicationsOne limit of this research is the reduced number of sampled listed IBs since the authors deleted countries that do not have both listed Islamic and conventional banks.Practical implicationsThe study is useful for investors that consider the Islamic ethical practices to make their investment decisions as well as for the standards-setting bodies that focus on establishing accounting standards for the Islamic banking industry.Originality/valueThe authors contribute to the value relevance literature by providing novel evidence on the value relevance in fully-fledged Islamic, fully-fledged conventional and hybrid Banks. The authors also provide new evidence on the moderating role of International Financial Reporting Standards (IFRS) and Auditing Organization for Islamic Financial Institutions standard (AAOIFI) for the value relevance of accounting information.

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Section: Accounting Standards and Value Relevancementioning

confidence: 99%

Accounting standards and value relevance of accounting information: a comparative analysis between Islamic, conventional and hybrid banks

Agbodjo

Toumi

Hussainey

2020

JAAR

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“…The world has witnessed rapid developments in the field of financial reporting, tending to adopt one set of financial reporting standards internationally. Islamic finance industry itself has experienced remarkable changes in which IFIs have been more market oriented (Haniffa and Hudaib, 2010;Mohammed and Mustafa, 2013;Mukhlisin, 2021;Mukhlisin and Fadzly, 2020). However, there is little research dedicated to exploring the impact of such developments on the national and international Islamic accounting standardisation projects.…”

Section: Prior Studies On Islamic Financial Reporting Standardisationmentioning

confidence: 99%

Competing institutional logics and power dynamics in Islamic financial reporting standardisation projects

Abras

Jayasinghe

2022

AAAJ

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PurposeThis 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/approachThe 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”.FindingsResearch 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/valueThis 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.

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“…Therefore, it is a normative structure for restructuring Islamic financial products or institutions in both banks and non-bank institutions, (ii) as a standard measure of compliance based on shariah values. The articles that can be grouped into this category include Ahmed et al (2019), Kasim (2012) and Mukhlisin (2020). Mukhlisin (2020) assumed that an Islamic financial industry could be categorised as a shariah entity.…”

Section: Shariah Compliancementioning

confidence: 99%

“…The articles that can be grouped into this category include Ahmed et al (2019), Kasim (2012) and Mukhlisin (2020). Mukhlisin (2020) assumed that an Islamic financial industry could be categorised as a shariah entity. This was obtained from financial reports based on the norm and ethics of Islam, and (iii) shariah compliance in non-bank financial institutions also functions as cofactors that influence their performance.…”

Section: Shariah Compliancementioning

confidence: 99%

Shariah Compliance in Islamic Economics: A Bibliometric Analysis

Sholihin

Ali

Wanto

2021

MJES

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This study aims to examine the literature related to shariah compliance in the Scopus database. Furthermore, classification and critical commentary were applied to find a new direction for developing studies on shariah compliance in Islamic economics. The bibliometric approach was used to analyse 233 articles, while a systematic literature review was used to classify issues from 82 articles on this paradigm. The results showed that the examined studies grew significantly and were influential in developing the shariah compliance paradigm. This was indicated by the author’s highest m-index of 0.666. However, this literature primarily concerns financial institutions and their relationship with the paradigm, followed by related literature in various industries, with extensive discussion on ethics and in the normative context. In this regard, shariah compliance issues can be classified into three topics, namely Islamic banks, non-bank financial institutions, and general firms. Shariah compliance was insufficiently used as an instrument to measure the product restructuring impact of an Islamic bank and a reflection of the compliance from the customer psychology perspective. In this context, it is necessary to transform the paradigm into “preventing exploitation” by introducing the customer exploitation index.

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Level of Maqāsid ul-Shari’āh’s in financial reporting standards for Islamic financial institutions

Cited by 16 publications

References 22 publications

Accounting standards and value relevance of accounting information: a comparative analysis between Islamic, conventional and hybrid banks

Accounting standards and value relevance of accounting information: a comparative analysis between Islamic, conventional and hybrid banks

Competing institutional logics and power dynamics in Islamic financial reporting standardisation projects

Shariah Compliance in Islamic Economics: A Bibliometric Analysis

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