The Implementation of Islamic Governance Disclosure: An Empirical Study of Indonesian Islamic Banking

Wahyudin, Agus; Fachrurrozie,; Nurkhin, Ahmad; Baswara, Satsya Yoga

doi:10.18502/kss.v3i11.4024

Cited by 1 publication

(1 citation statement)

References 12 publications

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“…Complete disclosure is required to enhance Islamic banks' transparency and accountability to the public interest (Grassa et al , 2018). Islamic corporate governance encompasses economics, legal systems and social values, all of which must be compliant with Shariah regulations (Wahyudin et al , 2019). Effective disclosure necessitates that information, such as financial data, is timely, accurate and sufficient, as well as easily accessible to users (Srairi, 2015).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries

Rahim

Shaharuddin

Suki

2023

JIABR

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Purpose The purpose of this study is to examine the level of Shariah governance disclosure among Islamic banks in Malaysia and the Gulf Cooperation Council (GCC) countries (i.e. Kuwait, Bahrain, United Arab Emirates, Qatar, Oman and Saudi Arabia). On top of that, the effect of Shariah governance disclosure on Islamic banks financial performance is investigated. Design/methodology/approach Data underwent quantitative content analysis and a mean comparison of the Shariah governance disclosure mechanisms as well as multiple regression analysis. Shariah governance information is obtained from the Islamic banks' official websites and the Bursa Malaysia Exchange. Findings The results of the content analysis revealed that the level of Shariah governance disclosure among Malaysian Islamic banks has been more pronounced than in the GCC countries. Additionally, the multiple regression analysis results specified that of the five Shariah governance disclosure mechanisms, the Shariah committee emerged as the strongest determinant in the financial performance of the Islamic banks, followed by transparency and disclosure. Practical implications Islamic banks should emphasise publishing Shariah governance information in annual reports to reflect superior accounting practices as assessed by certified Shariah auditors with an effective monitoring system. Originality/value The empirical findings are vital for serving as a guideline for Islamic banks in Malaysia and the GCC countries to disclose their practice of Shariah governance and gain empirical insights into its effect on firms’ financial performance. Following that, Islamic banks would improve their accounting practices while adhering to Shariah principles, strengthen internal controls and boost their brand reputation.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%