Abstract
Purpose: We explore the level and determinants of compliance with Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) financial and governance standards by Islamic banks (IBs).
Methodology: Our sample consists of 43 IBs across 8 countries. We use ordinary least squares regression analyses to examine the impact of Bank-specific characteristics and corporate governance mechanisms concerned with Board of Directors (BOD) and Sharia Supervisory Board (SSB) on levels of compliance with AAOIFI standards.
Findings: We find that the average compliance level based on AAOIFI standards concerning the Sharia Supervisory Board Report (SSBR) is 68%; corporate social responsibility report (CSRR) is 27% and presentation of financial statements (FS) is 73%. The aggregate disclosure based on the 3 indices is 56%. The analysis also shows that size, existing Sharia auditing department, age, and corporate governance of SSB are the main determinants of compliance levels.
Originality: he determinants of compliance with AAOIFI standards for IBs around the world not been explored before and, therefore, this paper is the first of its kind to this issue.
Methodology: Our sample consists of 43 IBs across 8 countries. We use ordinary least squares regression analyses to examine the impact of Bank-specific characteristics and corporate governance mechanisms concerned with Board of Directors (BOD) and Sharia Supervisory Board (SSB) on levels of compliance with AAOIFI standards.
Findings: We find that the average compliance level based on AAOIFI standards concerning the Sharia Supervisory Board Report (SSBR) is 68%; corporate social responsibility report (CSRR) is 27% and presentation of financial statements (FS) is 73%. The aggregate disclosure based on the 3 indices is 56%. The analysis also shows that size, existing Sharia auditing department, age, and corporate governance of SSB are the main determinants of compliance levels.
Originality: he determinants of compliance with AAOIFI standards for IBs around the world not been explored before and, therefore, this paper is the first of its kind to this issue.
| Original language | English |
|---|---|
| Pages (from-to) | 143-168 |
| Journal | International Journal of Islamic and Middle Eastern Finance and Management |
| Volume | 9 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 18 Apr 2016 |
Keywords
- determinants
- Islamic banking
- AAOIFI standards
- compliance and non-compliance
- cross-country
Access to Document
- HUSSAINEY_cright_9A_Determinants of Compliance with AAOIFI Standards by Islamic Banks
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