The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports

The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports

This research investigates the extent of disclosure in Islamic banking annual reports. The period of study is from year 1997 to 2006, a period after the regulations for financial reporting rapidly developed. This study reviews the issues on disclosure extent and the Shari’ah perspectives related to...

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Main Author: Nurul Huda, Abdul Majid
Format: Thesis
Language:eng
eng
Published: 2012
Subjects:
HF5601-5689 Accounting
Online Access:https://etd.uum.edu.my/3466/1/s90761.pdf
https://etd.uum.edu.my/3466/7/s90761.pdf
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Taufil Mohd, Kamarun Nisham
Ismail, Abdul Ghafar
Ishak, Zuaini
topic HF5601-5689 Accounting
spellingShingle HF5601-5689 Accounting
Nurul Huda, Abdul Majid
The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports
description This research investigates the extent of disclosure in Islamic banking annual reports. The period of study is from year 1997 to 2006, a period after the regulations for financial reporting rapidly developed. This study reviews the issues on disclosure extent and the Shari’ah perspectives related to contracts, governance and disclosure. Information disclosure can be divided into two categories -voluntary and regulated The traditional view on disclosure highlighted that the added value of information can be used to reduce conflicts. Meanwhile, from the perspective of the Shari’ah, the contracting parties need to observe the Shari’ah principles in identifying the information that need to be disclosed. This study examined the disclosure practice of 95 annual reports of full- fledged Islamic banks (IB) and windows (Islamic banking scheme or IBS). Comparative analysis on the practices of IB and IBS indicated that information disclosed in the IB’s and IBS’s annual reports are slightly different especially for voluntary disclosure and in the period before and immediately after the enforcement of disclosure regulations (2000-2003). Furthermore, this study found that: i) bank size, board independence and the number of Shari’ah committee members significantly determine the extent of voluntary disclosure; ii) bank size, liquidity, board committee, board independence and audit committee independence significantly determine the extent of regulated disclosure; iii) size and board independence significantly determine the extent of all type of disclosure; and iv) there is an evident of co-integrated relationship among a few sets of variables in the long run. Overall, the minimum best practices are not satisfactorily met judging from both voluntary disclosure and the level of conformity to regulations. Regulators may find these findings to be useful for Shari’ah governance and monitoring purposes as well as in promoting transparency, ‘market discipline’ and the social functions of this industry to the Muslims.
format Thesis
qualification_name Ph.D.
qualification_level Doctorate
author Nurul Huda, Abdul Majid
author_facet Nurul Huda, Abdul Majid
author_sort Nurul Huda, Abdul Majid
title The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports
title_short The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports
title_full The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports
title_fullStr The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports
title_full_unstemmed The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports
title_sort extent of information disclosed in the practice of islamic banking annual reports
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2012
url https://etd.uum.edu.my/3466/1/s90761.pdf
https://etd.uum.edu.my/3466/7/s90761.pdf
_version_ 1747827578956152832
spelling my-uum-etd.34662016-04-20T07:25:52Z The Extent of Information Disclosed in the Practice of Islamic Banking Annual Reports 2012-08 Nurul Huda, Abdul Majid Taufil Mohd, Kamarun Nisham Ismail, Abdul Ghafar Ishak, Zuaini Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HF5601-5689 Accounting This research investigates the extent of disclosure in Islamic banking annual reports. The period of study is from year 1997 to 2006, a period after the regulations for financial reporting rapidly developed. This study reviews the issues on disclosure extent and the Shari’ah perspectives related to contracts, governance and disclosure. Information disclosure can be divided into two categories -voluntary and regulated The traditional view on disclosure highlighted that the added value of information can be used to reduce conflicts. Meanwhile, from the perspective of the Shari’ah, the contracting parties need to observe the Shari’ah principles in identifying the information that need to be disclosed. This study examined the disclosure practice of 95 annual reports of full- fledged Islamic banks (IB) and windows (Islamic banking scheme or IBS). Comparative analysis on the practices of IB and IBS indicated that information disclosed in the IB’s and IBS’s annual reports are slightly different especially for voluntary disclosure and in the period before and immediately after the enforcement of disclosure regulations (2000-2003). Furthermore, this study found that: i) bank size, board independence and the number of Shari’ah committee members significantly determine the extent of voluntary disclosure; ii) bank size, liquidity, board committee, board independence and audit committee independence significantly determine the extent of regulated disclosure; iii) size and board independence significantly determine the extent of all type of disclosure; and iv) there is an evident of co-integrated relationship among a few sets of variables in the long run. Overall, the minimum best practices are not satisfactorily met judging from both voluntary disclosure and the level of conformity to regulations. Regulators may find these findings to be useful for Shari’ah governance and monitoring purposes as well as in promoting transparency, ‘market discipline’ and the social functions of this industry to the Muslims. 2012-08 Thesis https://etd.uum.edu.my/3466/ https://etd.uum.edu.my/3466/1/s90761.pdf text eng validuser https://etd.uum.edu.my/3466/7/s90761.pdf text eng public Ph.D. doctoral Universiti Utara Malaysia Abdul Rahman, A. (1998). Disclosure of corporate financial information in Malaysia. Ph.D Thesis, University of New Castle, UK. Abdul Rahman, A. (2009). Lending structure and bank risk exposures: The case of Islamic and conventional banks in Malaysia. Ph.D Thesis, IIUM, Malaysia. Abdul Rahman, A.K (2010). An introduction to Islamic accounting theory and practice. 1st ed, Kuala Lumpur: CERT. Abdul Rashid, H.M. (2000). Cost of capital, disclosure qualify and board composition and structure: empirical analysis of retail banks listed in London stock exchange. 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