The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia

The purpose of this study was to examine the current disclosure practices of Shariah non-compliant income in the annual reports of Islamic banking institutions in Malaysia. This study investigated factors influencing the Shariah non-compliant income disclosure based on the characteristics (size, pro...

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Main Author:	Wan A'tirah Mahyudin
Format:	Thesis
Language:	English
Subjects:	Banks and banking > Religious aspects > Islam
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spelling	my-usim-ddms-123772024-05-29T04:02:49Z The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia Wan A'tirah Mahyudin The purpose of this study was to examine the current disclosure practices of Shariah non-compliant income in the annual reports of Islamic banking institutions in Malaysia. This study investigated factors influencing the Shariah non-compliant income disclosure based on the characteristics (size, profitability and age) of Islamic banks. This study utilised five-year annual reports of sixteen Islamic banks in Malaysia to examine the extent of disclosure of the banks. A disclosure index was developed, and a dichotomous procedure was used to examine the extent of disclosure by the banks. In addition, a simple linear regression was performed to investigate the factors influencing the Shariah non-compliant income disclosure in the annual report of Islamic banks. Based on the content analysis, it was found that the extent of disclosure by Islamic banks was generally reasonable and steadily improving, but that there were still areas for improvement. The results of this study revealed that different approaches were taken by Islamic banks to disclose information about Shariah noncompliant income in which most of the banks disclosed such information in the Shariah Committee's Report, Notes to Financial Statement, and Pillar 3 Disclosure. However, very few disclosed the information in the Director's Report even though the ultimate body responsible to observe Shariah non-compliance is the board of directors. The findings of this study showed that most of the earnings of Shariah non-compliant income were derived fiom the bank's involvement in Shariah non-compliant products and services, and the failure of people and the system. The regression analysis showed that size, profitability, and the age of the banks positively influenced the disclosure of Shariah non-compliant income by Islamic banks in Malaysia even though it was not statistically significant. The results of this study contribute to the existing knowledge in the literature for addressing the concerns about Shariah compliance and reporting issues in the Islamic banking industry. Universiti Sains Islam Malaysia 2017 Thesis en https://oarep.usim.edu.my/handle/123456789/12377 https://oarep.usim.edu.my/bitstreams/aedf1de7-038a-4f2b-99b5-2011247c791f/download 8a4605be74aa9ea9d79846c1fba20a33 Banks and banking--Religious aspects--Islam
institution	Universiti Sains Islam Malaysia
collection	USIM Institutional Repository
language	English
topic	Banks and banking--Religious aspects--Islam
spellingShingle	Banks and banking--Religious aspects--Islam Wan A'tirah Mahyudin The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia
description	The purpose of this study was to examine the current disclosure practices of Shariah non-compliant income in the annual reports of Islamic banking institutions in Malaysia. This study investigated factors influencing the Shariah non-compliant income disclosure based on the characteristics (size, profitability and age) of Islamic banks. This study utilised five-year annual reports of sixteen Islamic banks in Malaysia to examine the extent of disclosure of the banks. A disclosure index was developed, and a dichotomous procedure was used to examine the extent of disclosure by the banks. In addition, a simple linear regression was performed to investigate the factors influencing the Shariah non-compliant income disclosure in the annual report of Islamic banks. Based on the content analysis, it was found that the extent of disclosure by Islamic banks was generally reasonable and steadily improving, but that there were still areas for improvement. The results of this study revealed that different approaches were taken by Islamic banks to disclose information about Shariah noncompliant income in which most of the banks disclosed such information in the Shariah Committee's Report, Notes to Financial Statement, and Pillar 3 Disclosure. However, very few disclosed the information in the Director's Report even though the ultimate body responsible to observe Shariah non-compliance is the board of directors. The findings of this study showed that most of the earnings of Shariah non-compliant income were derived fiom the bank's involvement in Shariah non-compliant products and services, and the failure of people and the system. The regression analysis showed that size, profitability, and the age of the banks positively influenced the disclosure of Shariah non-compliant income by Islamic banks in Malaysia even though it was not statistically significant. The results of this study contribute to the existing knowledge in the literature for addressing the concerns about Shariah compliance and reporting issues in the Islamic banking industry.
format	Thesis
author	Wan A'tirah Mahyudin
author_facet	Wan A'tirah Mahyudin
author_sort	Wan A'tirah Mahyudin
title	The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia
title_short	The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia
title_full	The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia
title_fullStr	The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia
title_full_unstemmed	The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia
title_sort	disclosure practices of shariah non-compliant income in the annual reports of islamic banks in malaysia
granting_institution	Universiti Sains Islam Malaysia
_version_	1812444686419230720

The disclosure practices of Shariah non-compliant income in the annual reports of Islamic banks in Malaysia

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