Islamic Banks’ Sharia Compliance Disclosure: An International Evidence

Benamraoui, A., Moussa, T. and Hussien, M. 2023. Islamic Banks’ Sharia Compliance Disclosure: An International Evidence. Accounting Research Journal. 36 (4/5), pp. 327-348. https://doi.org/10.1108/ARJ-07-2022-0157

TitleIslamic Banks’ Sharia Compliance Disclosure: An International Evidence
TypeJournal article
AuthorsBenamraoui, A., Moussa, T. and Hussien, M.
Abstract

Purpose: Using a novel information disclosure framework, the paper investigates the disparity and compliance of information disclosures in Islamic banks (IBs). Specifically, the research examines IBs' compliance with Sharia disclosure requirements.

Design/methodology/approach: To determine the extent of disclosures and compliance with Islamic business principles, content analysis is applied to the annual reports of a sample of IBs from eleven countries. A comprehensive reporting framework has also been developed to assess the transparency and compliance of IBs with Islamic business principles. Institutional theory and core Islamic principles are used to inform the study and its findings.

Findings: The results reveal that IBs demonstrate limited transparency on the key Sharia compliance issues, and there is a wide variation in the level of reporting across the countries studied. Moreover, we find that IBs located in single integrated regulatory (RF) countries disclose more information, followed by those located in dual RF countries and then those located in Islamic RF countries.

Originality/value: The study presents a unique and comprehensive framework to assess the areas of Sharia disclosure by IBs and provides conceptual rationing for the actual level of IBs’ Sharia reporting. The study also fills a significant gap in the literature since most studies in this field are based on a single-country study. The results are deemed of direct relevance to IBs' managers, investors, policymakers, regulators, and the wider public, particularly in the Muslim world.

KeywordsDisclosure
Islamic banks
Institutional theory
Sharia compliance
JournalAccounting Research Journal
Journal citation36 (4/5), pp. 327-348
ISSN1030-9616
Year2023
PublisherEmerald Publishing Limited
Accepted author manuscript
License
CC BY-NC 4.0
File Access Level
Open (open metadata and files)
Digital Object Identifier (DOI)https://doi.org/10.1108/ARJ-07-2022-0157
Publication dates
Published20 Sep 2023

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