Forthcoming

  • Shariah disclosure expectation gap between Shariah practitioners and Islamic banks’ customers in Malaysia (2021-02-12)
    Nur Afiqah Md Amin Yekon Equipment (M) Sdn Bhd, Kampung Subang Baru, 40150 Shah Alam, Selangor, Malaysia Noraini Mohd Ariffin Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur 53100, Malaysia A.H. Fatima Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur 53100, Malaysia

    Research aim: The aim of this study is to examine the possibility of a gap in perception between Shariah practitioners and customers of Islamic banks on the importance of Shariah disclosure by Islamic banks.
    Design/ Methodology: Questionnaires were distributed to Shariah practitioners, consisting of Shariah committee members and Shariah officers, and Islamic banks’ customers who were lecturers and final year accounting students. The concept of expectation gap derived from the auditing literature was extended and applied to this study’s context. A total of 64 and 200 questionnaires were distributed to Shariah practitioners and customers of Islamic banks, respectively. The response rates were 41% for Shariah practitioners and 65% for Islamic banks’ customers.
    Research findings: The results indicate that Shariah practitioners and customers perceive all Shariah disclosure items as important to be disclosed. However, a few significant differences were noted between both groups, suggesting the existence of an expectation gap, albeit minimal. Only a minimal gap between the selected customers and practitioners may be reasonable, as the group of customers consisted of informed customers.
    Theoretical contribution/ Originality: This study contributes to knowledge as there is a dearth of literature that determines customers’ perceptions of Shariah disclosure.
    Practitioner/ Policy Implications: The results provide regulators and Islamic banks with valuable insight into the importance of Shariah disclosure items from the points of view of customers and Shariah practitioners on which items they concur as important and which items they differ in opinion.
    Limitation/ Implication: This study is an initial effort to examine the expectation gap between knowledgeable customers and Shariah practitioners on the Shariah disclosure made by Islamic banks. The customers are respondents from only one university; hence, there is a limitation concerning the generalisability of the findings. Thus, future research could extend such an investigation to other customers in order to enhance generalizability.
    Keywords: Expectation Gap, Shariah Disclosure, Islamic Banks
    Type of article: Research paper
    JEL Classification: G21, M41, N25

  • The practice and determining factors of voluntary graphics disclosure in local government financial statements in Indonesia (2021-03-08)
    Agung Nur Probohudono Accounting Study Program, Universitas Sebelas Maret, Kota Surakarta, Jawa Tengah 57126, Indonesia Supriyanto Supriyanto Accounting Study Program, Universitas Sebelas Maret, Kota Surakarta, Jawa Tengah 57126, Indonesia Estetika Mutiaranisa Kurniawati Accounting Study Program, Universitas Sebelas Maret, Kota Surakarta, Jawa Tengah 57126, Indonesia

    Research aim: This study aims to measure the extent and the determinants of voluntary graphics disclosure in local government financial statements in Indonesia. 
    Design/ Methodology/ Approach: This study used 197 audited local government financial statements in Indonesia, comprising 155 regency governments and 32 district governments. The financial statements of these 197 local governments were examined to measure the extent of voluntary graphics disclosure and investigate the potential determinants of voluntary graphics disclosure. This study used multiple regression analysis to examine the determinants (performance, level of dependency, location, education background, and competency) of voluntary graphics disclosures.
    Research findings: The results indicate a low extent of voluntary graphics disclosure in the local government financial statements in Indonesia. The average voluntary graphics disclosure rate is 44.88%, demonstrating a lack of usage of voluntary graphics disclosure. The results also indicate that only performance has an insignificant effect on the extent of voluntary graphics disclosure.
    Practitioner/ Policy implication: The findings regarding voluntary graphics disclosure in local government financial statements should be of concern to regulatory authorities and standard setters in Indonesia.
    Research limitation: This study focuses on measuring the extent and the determinants of voluntary graphics disclosure practices among 197 local governments in Indonesia. Hence, the sample of this study is limited to the local governments employing graphics in providing information in their financial statements for the year 2015.
    Keywords: Local Government Financial Statements, Local Government, Voluntary Graphics Disclosure
    Type of article: Research paper
    JEL Classification: H70

  • Customers, control, and the performance of Islamic banks (2021-03-08)
    Ahmadasri Alaudin Accounting Tunku Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Sintok, Kedah, Malaysia

    Research aim: This study explores the relationship between customer fairness and trust building and the performance of bank branches.
    Design/Methodology/Approach: Methodologically, this relationship is first explored with no mediating variable using bivariate correlation analysis as a precursor to a more sophisticated path analysis where this relationship is hypothesized to be mediated by control systems. The data for these analyses are subjective assessments elicited from a survey of branch managers working in two different Islamic banks in Malaysia.
    Research Findings: Overall, the results suggest that customer trust building is an important determinant of performance relative to expectations, both directly and indirectly through the use of control systems. However, there is less support for a significant association between customer fairness building and performance.
    Theoretical contribution/Originality: Given the impressive growth in the size and popularity of Islamic banking around the world, it is an increasingly pertinent domain for academic research. This study has sought to contribute to this literature from the perspective of organizational dynamics and organizational performance as perceived by branch managers. It also contributes to Simons’ levers of control framework by operationalizing its belief system lever using values (i.e., trust and fairness building).
    Practitioner/Policy implication: Bank management both at corporate and business (operating) levels may benefit from the findings in implementing strategy and developing value-based competitive advantage in a form of trust and fairness.
    Limitation/Implication: The lack of support for customer building results may provide opportunity for further research into this. It would have been interesting to elicit views from a wider range of bank personnel (i.e., regular employees as well as branch managers). Whilst on the other hand it may have been beneficial to utilize more objective measurements, particularly with respect to performance.
    Keywords: Control systems, Fairness, Islamic banks, Malaysia, Path analysis, Trust
    Type of article: Research paper
    JEL Classification: G21, M41, M31