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

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 di...

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Bibliographic Details
Published in:Journal of Islamic Accounting and Business Research
Main Author: Abdul Rahim M.; Shaharuddin N.’.S.; Mohd Suki N.
Format: Article
Language:English
Published: Emerald Publishing 2024
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85159000522&doi=10.1108%2fJIABR-08-2021-0235&partnerID=40&md5=ae3726d7ec218d16cb4f1503508bba56
id 2-s2.0-85159000522
spelling 2-s2.0-85159000522
Abdul Rahim M.; Shaharuddin N.’.S.; Mohd Suki N.
Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
2024
Journal of Islamic Accounting and Business Research
15
4
10.1108/JIABR-08-2021-0235
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85159000522&doi=10.1108%2fJIABR-08-2021-0235&partnerID=40&md5=ae3726d7ec218d16cb4f1503508bba56
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. © 2023, Emerald Publishing Limited.
Emerald Publishing
17590817
English
Article

author Abdul Rahim M.; Shaharuddin N.’.S.; Mohd Suki N.
spellingShingle Abdul Rahim M.; Shaharuddin N.’.S.; Mohd Suki N.
Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
author_facet Abdul Rahim M.; Shaharuddin N.’.S.; Mohd Suki N.
author_sort Abdul Rahim M.; Shaharuddin N.’.S.; Mohd Suki N.
title Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
title_short Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
title_full Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
title_fullStr Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
title_full_unstemmed Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
title_sort Shariah governance disclosure and its effect on Islamic banks' financial performance: evidence from Malaysia and GCC countries
publishDate 2024
container_title Journal of Islamic Accounting and Business Research
container_volume 15
container_issue 4
doi_str_mv 10.1108/JIABR-08-2021-0235
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85159000522&doi=10.1108%2fJIABR-08-2021-0235&partnerID=40&md5=ae3726d7ec218d16cb4f1503508bba56
description 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. © 2023, Emerald Publishing Limited.
publisher Emerald Publishing
issn 17590817
language English
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