The embezzlement of funds from religious organizations, particularly in western church institutions, is becoming more common. Such scandals have raised concerns about their internal control systems. Despite the lack of any reported financial scandals in mosques, there is a growing concern as to whether they experience the same deficiencies as other religious institutions do. Our study examines the internal control procedures related to the receiving income and disbursing funds in West Malaysia’s state mosques. A questionnaire survey and informal interviews were used to collect the data. The results indicate that these mosques have a strong internal control system vis-à-vis these two activities. This study also reveals that their practice of several basic control activities (e.g., segregating duties, recording financial transactions, and authorizing particular activities) is satisfactory. Though this is an exploratory study, the results may provide a benchmark for further studies examining internal control practices in religious organizations.

No abstract

It has been clearly shown that financing based

The embezzlement of funds from religious organizations, particularly in western church institutions, is becoming more common. Such scandals have raised concerns about their internal control systems. Despite the lack of any reported financial scandals in mosques, there is a growing concern as to whether they experience the same deficiencies as other religious institutions do. Our study examines the internal control procedures related to the receiving income and disbursing funds in West Malaysia’s state mosques. A questionnaire survey and informal interviews were used to collect the data. The results indicate that these mosques have a strong internal control system vis-à-vis these two activities. This study also reveals that their practice of several basic control activities (e.g., segregating duties, recording financial transactions, and authorizing particular activities) is satisfactory. Though this is an exploratory study, the results may provide a benchmark for further studies examining internal control practices in religious organizations.

This study examines whether Shari'ah approved companies with majority Muslim directors adopt better corporate governance (CG) than non-Shari'ah approved companies with majority non-Muslim directors and whether the performance of the former is better than that of the latter. The objective of this study is to determine whether religious factor has an influence in adopting corporate governance mechanisms and in performance. Performance of the companies is measured in relation to three perspectives, namely, Shari'ah compliance, environmental performance, and social performance. This study used secondary data and the leading 50 firms were selected from each group based on their market capitalization for the year 2002. The proxies for good corporate governance are CEO non-duality, the proportion of non-executive directors on the board, and the proportion of independent non-executive directors on the board. The proxies used to measure Shari'ah compliance are the ratio of prohibited income to total income and the ratio of prohibited expenses to total expenses. The variables used to measure the environmental and social performance are certification of ISO 14001 and OHsas 18001, respectively. The results generally showed that there is little significant difference between the CG and performance of Shari'ah approved companies with majority Muslim directors and non-Shari'ah approved companies with majority non-Muslim directors, although the former is marginally better for both, in a few instances.