The influence of the SSB’s characteristics toward Sharia compliance of Islamic banks

Muhammad, Rifqi; Annuar, Hairul Azlan; Taufik, Muhammad; Nugraheni, Peni

doi:10.1080/23311975.2021.1929033

Cited by 26 publications

(60 citation statements)

References 62 publications

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“…A study of socioeconomic Islamic banking is being carried out using the Tawhidi epistemology introduced by Choudhury and Harahap (2009), which emphasizes the need for Islamic banks to make positive contributions to the community (Muhammad et al , 2021). This distinguishes Islamic banking from conventional banking, namely, the Islamic worldview (Dusuki, 2008), which uses the Quran and Sunnah and is well understood by the SSB (Muhammad et al , 2021). Islamic banks should conform to the Quranic and Sunnah, which set out their objectives to achieve a level of Shari’ah compliance (Figure 1).…”

Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

“…Shari’ah compliance is proxied by legal and social requirements (Ahmed, 2011; Muhammad et al , 2021; Taufik, 2020), where the two proxies represent form and substance. Formally, the legal requirement requires Islamic banks to comply with Shari’ah rules, where one of the proxies is an attestation of financial statements that financial reporting does not indicate any elements of injustice and prohibition, such as noncompliance income, usury and maysir (gambling).…”

Section: Introductionmentioning

confidence: 99%

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Can Shari’ah supervisory board and Islamic bank characteristics reduce tax avoidance? Evidence in Indonesia and Malaysia

Taufik

2022

JFC

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Purpose This study aims to shed light on Shari’ah supervisory boards (SSBs) and the possibilities of Islamic banks to reduce the tax avoidance. Performance and Shari’ah compliance have been extensively studied; however, tax avoidance remains a challenge. Design/methodology/approach SSB characteristics, based on resource dependence theory, influence tax avoidance, including SSB size, educational level, expertise, reputation, remuneration and turnover. The samples were obtained from Islamic banks in Indonesia and Malaysia (2010–2020) using the data panel method. Findings Islamic banks avoid taxes through the effective tax rate and book tax difference. SSBs who have more expertise play a role in investigating the complexity of tax avoidance, and SSB reputation, who is a member of the Islamic bank regulator, understands immorality, resulting in reduced tax avoidance. Moreover, the recruitment system has been effective, as SSBs with more expertise have become more prevalent. Meanwhile, SSB from a Shari’ah background works only in regulated areas, simplifying Shari’ah compliance, in particular, attestation of financial reporting. A heavy workload is created by cross-membership, resulting in the neglect of the immoral value of tax avoidance. The calculation of tax avoidance also includes remuneration and bank assets. Practical implications Given the uniqueness of Islamic banks contributing to social welfare, tax regulators need to review the appropriateness of fees that can be treated as taxes. Tax regulators can join hands with Islamic bank regulators on this review. Originality/value To the best of the authors’ knowledge, this study is one of the first to examine the characteristics of SSBs and Islamic banks on tax avoidance. Separating Islamic banks by country enriches the analysis.

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Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Can Shari’ah supervisory board and Islamic bank characteristics reduce tax avoidance? Evidence in Indonesia and Malaysia

Taufik

2022

JFC

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“…Shariah audit or Shariah review is a mandatory condition for effective monitoring and supervision model. Shariah audit is supervised by the Shariah governance framework and positively influences loan portfolio risk-taking (Muhammad et al, 2021) Hypothesis 4. Shariah Audit Committee effectiveness has a significant positive relationship with IBs' performance.…”

Section: Shariah Audit Committeementioning

confidence: 99%

“…This can be done by raising the total number of Shariah board members along with advanced qualifications, level of independence, and supervision. Hence the quality and performance level of the Shariah board in IBs' shows improvement (Muhammad et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Do Shariah Governance Attributes Impact the Islamic Banks’ Performance? Evidence from Pakistan

Ashraf¹,

Remili²,

Bakar³

2022

IJARAFMS

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The current study purposes to evaluate the extent of the Shariah Governance (SG) attributes and their effect on Islamic banks (IBs') financial performance. To the extent of the SG attributes, the governance index was created on the four sub-indices which are Shariah board size, number of board meetings, qualification, and Shariah audit committee. Findings exposed that SG attributes in Pakistani IBs significantly influence IBs' performance. The study results indicated that IBs' in Pakistan appreciated the efficiency of the Shariah board considerably and better than the interest-based mechanisms of corporate governance (CG). The present study uses a multiple regression model. The study findings recommended a significant statistical relationship between SG attributes and IBs performance that would suggest that better SG had a causal connotation with immense performance in Pakistani IBs'. The current paper may serve to assist IBs' stakeholders in better understanding the SG practices of IBs'. In addition, the observed significant relationships among the SG attributes and performance should explain to the IBs' administrators the necessity of improving the existing SG requirements. The present study will be contributed to help the stakeholders connected with IBs' be aware of the SG practices of the IBs' in Pakistan

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“…id al-Sharīáh oriented performance. In another study, Muhammad et al (2021) explored the impact of Shariah board characteristics on Shariah compliance using data from different Asian countries for the nine years' period (2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018). Shariah board characteristics included board size, education, expertise, cross membership, rotation of Shariah board members and their remuneration.…”

Section: Determinants Of Maqās Id Al-sharīáh Oriented Performancementioning

confidence: 99%

Examining the Influence of Maqas ¯. id al-Shar¯ıah Orientation on Financial Performance of Islamic Banks: Evidence from Pakistan

Javed¹,

Ayaz²,

Kalim³

2022

j. Islam. bus. manag.

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Purpose: Islamic Banks (IBs) have been criticized for convergence towards their conventional counterparts by replicating their products. This criticism may be reinforced due to their poor maqās . id al-Sharīáh oriented performance. Arguably, it is essential that IBs enhance their maqās . id al-Sharīáh oriented performance to differentiate themselves from conventional banks and to improve their public image of being 'Islamic'. In this context, the purpose of the present study is to evaluate the impact of maqās . id al-Sharīáh Orientation on financial performance of IBs. Methodology:The study regresses financial performance on maqās . id al-Sharīáh oriented performance by applying fixed effects model. Unbalanced panel data, for the period of 2008-2020, has been extracted from the annual reports of five full-fledged Islamic banks operating in Pakistan. The study uses five independent variables that represent maqās . id al-Sharīáh orientation namely, protection of faith, protection of life, protection of intellect, protection of family and protection of wealth. Findings: The results reveal that faith and wealth-oriented performances have positive relationships whereas family-oriented performance has a negative relationship with financial performance. Significance: The present study evaluates the impact of five major Maqasid al-Shariah on financial performance whereas the existing literature focuses on fewer maqās . id al-Sharīáh while examining the stated relationship. Practical Implication: The study suggests that Islamic banks should improve their faith and wealth oriented performances to be more profitable and to differentiate themselves from their conventional counterparts.

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The influence of the SSB’s characteristics toward Sharia compliance of Islamic banks

Cited by 26 publications

References 62 publications

Can Shari’ah supervisory board and Islamic bank characteristics reduce tax avoidance? Evidence in Indonesia and Malaysia

Can Shari’ah supervisory board and Islamic bank characteristics reduce tax avoidance? Evidence in Indonesia and Malaysia

Do Shariah Governance Attributes Impact the Islamic Banks’ Performance? Evidence from Pakistan

Examining the Influence of Maqas ¯. id al-Shar¯ıah Orientation on Financial Performance of Islamic Banks: Evidence from Pakistan

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