Islamic banks' risk, profitability and risk disclosure

Dignah, Ashwag; Latiff, Radziah Abdul; Abdul-Rahman, Aisyah

doi:10.1504/aajfa.2012.048240

Cited by 8 publications

(5 citation statements)

References 18 publications

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“…Debt as one source of funding from having fixed costs does not cause Islamic banks to provide broader disclosure of the risks involved in their business. The results of this study are different from the findings of Dignah et al (2012), which demonstrate that the debt to asset ratio has an influence on risk disclosure. One can suggest that this finding indicates that Islamic bank investors do not use risk disclosure as a factor when analyzing the feasibility of their investment.…”

Section: Discussioncontrasting

confidence: 99%

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Corporate governance mechanism and risk disclosure by Islamic banks in Indonesia

Mukhibad

Nurkhin

Rohman

2020

Banks and Bank Systems

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The disclosure of risk by Islamic banks is very important, as this openness of information is emphasized in Islamic teachings. The purpose of this article is to provide empirical evidence regarding the influence of the number of members of the Sharia Supervisory Board (SSB) and their cross membership, the debt and the Syirkah fund ratio (investment accounts), the composition of the board of commissioners, the number of audit committee members, and the amount of assets on risk disclosure by Indonesian Islamic banks. The study uses content analysis techniques to measure risk disclosure by Islamic banks. The analysis uses panel data regression with observations for the period of 2010–2017. Based on the Fixed Effect Model, the study found out that the number of SSB members, the cross memberships of SSB, the ratio of independent commissioners to the number of audit committees do not influence risk disclosure. The leverage to investment account ratio does not influence risk disclosure. Also, the results of this study demonstrate that only the amount of assets influences risk disclosure.

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Section: Discussioncontrasting

confidence: 99%

“…One type of disclosure that Islamic banks must make is risk disclosure (Dignah, Latiff, & Rahman, 2012; OJK, 2016). Among various studies describing information disclosure by Islamic banks, many have focused on disclosing information about banks' social activities (see Disclosure of risks faced by Islamic banks is still poorly studied.…”

Section: Introductionmentioning

confidence: 99%

Corporate governance mechanism and risk disclosure by Islamic banks in Indonesia

Mukhibad

Nurkhin

Rohman

2020

Banks and Bank Systems

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“…Many theoretical and empirical literature suggest that these can potentially affect compliance and disclosure level in Islamic banks. The first variable financial performance was examined by El-Halaby and Hussainey (2016); Dignah et al (2012); Mallin et al (2014) who found that profitability has a significant impact on disclosure.…”

Section: Control Variablesmentioning

confidence: 99%

Compliance and Determinants of the AAOIFI Financial Standards: Evidence from the MENA Region

Bechihi¹,

Boumediene²,

Nafti³

2021

APMAJ

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This paper analyses the level of compliance of financial disclosure with accounting standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and its determinants in Middle Eastern and North African (MENA) Islamic banks. Based on 40 Islamic banks in seven MENA countries over the period 2010-2016, the authors used a disclosure index to measure the compliance level and the effect of governance characteristics and the Sharia Board on the extent of compliance with the AAOIFI accounting standards. Results show a high level of compliance (67%). Using the Feasible General Least Square Regression, we found that the presence of women on the board of directors, the reputation of the Sharia Board, and the cross membership of Sharia Board members are key determinants of compliance. While independence of board of directors is significantly associated to reduced financial disclosure. The research contributes to the literature on accounting and the Islamic banking sector. These findings will be useful for regulatory authorities to better- understand the accounting disclosure practices of Islamic banks. Although findings are encouraging, the sample is limited only to banks. Future researches could deal with a larger sample and review other disclosure items to ensure compliance with the AAOIFI standards. Few empirical studies have explored the determinants of compliance with the AAOIFI standards for Islamic banks in MENA countries. Therefore, this work complements and enriches the research in the field in the MENA region. Keywords: financial disclosure, AAOIFI compliance, Islamic banks, governance characteristics, Sharia board

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“…As a consequence of these specific risks inherent in Islamic banking, several papers (e.g. Errico and Farahbakhsh, 1998;Dignah, Latiff, and Rahman, 2012) point out that prudential supervision and regulations governing Islamic financial institutions should place a greater emphasis on operational risk and on high standard of risk disclosure. For instance, we posit that, when compared to their conventional counterparts, Islamic banks are required to be more transparent and accountable.…”

Section: Banks' Feature and Risk Disclosure: Islamic Banks Versus Conventional Banksmentioning

confidence: 99%

Is bank creditworthiness associated with risk disclosure behavior? Evidence from Islamic and conventional banks in emerging countries

Grassa

Moumen

Hussainey

2020

Pacific-Basin Finance Journal

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Islamic banks' risk, profitability and risk disclosure

Cited by 8 publications

References 18 publications

Corporate governance mechanism and risk disclosure by Islamic banks in Indonesia

Corporate governance mechanism and risk disclosure by Islamic banks in Indonesia

Compliance and Determinants of the AAOIFI Financial Standards: Evidence from the MENA Region

Is bank creditworthiness associated with risk disclosure behavior? Evidence from Islamic and conventional banks in emerging countries

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