Pub Date : 2022-10-12DOI: 10.1108/ijif-01-2021-0007
Salim Al-Ali
PurposeThis article seeks to propose a defined set of Sharīʿah standards and guidelines for the charity account in order to provide clear guidance to Islamic financial institutions (IFIs) and eventually create a standardised practice in the management of the charity account by IFIs worldwide.Design/methodology/approachThis article is based on a literature review regarding the origin and concept of the charity account for IFIs. It makes reference to various primary Sharīʿah sources and contemporary Sharīʿah standards pertaining to impermissible income as it relates to the charity account. It also analyses secondary sources of reference, in particular research papers and case studies on the same subject matter.FindingsThis article proposes relevant Sharīʿah standards required for the better functioning and standardisation of the charity account application by IFIs.Research limitations/implicationsThis article will help IFIs, standard-setting bodies and regulators to develop a defined charity account framework. It also addresses the gaps discussed in past research and case studies that have not been resolved to date, particularly on the determination and management of charity accounts at the level of IFIs.Practical implicationsThe charity account will be better controlled and thus eliminating potential reputational issues arising from collecting and disbursing commitment to donate amounts (CDA).Social implicationsThe charity account distribution will be better managed and thus of more benefit to the society and recipients.Originality/valueThis article promotes the idea of standardisation in the practices of charity accounts, especially in terms of sources and disbursement.
{"title":"Charity account in Islamic financial institutions: creating a defined Sharīʻah standard","authors":"Salim Al-Ali","doi":"10.1108/ijif-01-2021-0007","DOIUrl":"https://doi.org/10.1108/ijif-01-2021-0007","url":null,"abstract":"PurposeThis article seeks to propose a defined set of Sharīʿah standards and guidelines for the charity account in order to provide clear guidance to Islamic financial institutions (IFIs) and eventually create a standardised practice in the management of the charity account by IFIs worldwide.Design/methodology/approachThis article is based on a literature review regarding the origin and concept of the charity account for IFIs. It makes reference to various primary Sharīʿah sources and contemporary Sharīʿah standards pertaining to impermissible income as it relates to the charity account. It also analyses secondary sources of reference, in particular research papers and case studies on the same subject matter.FindingsThis article proposes relevant Sharīʿah standards required for the better functioning and standardisation of the charity account application by IFIs.Research limitations/implicationsThis article will help IFIs, standard-setting bodies and regulators to develop a defined charity account framework. It also addresses the gaps discussed in past research and case studies that have not been resolved to date, particularly on the determination and management of charity accounts at the level of IFIs.Practical implicationsThe charity account will be better controlled and thus eliminating potential reputational issues arising from collecting and disbursing commitment to donate amounts (CDA).Social implicationsThe charity account distribution will be better managed and thus of more benefit to the society and recipients.Originality/valueThis article promotes the idea of standardisation in the practices of charity accounts, especially in terms of sources and disbursement.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45345035","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-30DOI: 10.1108/ijif-04-2021-0065
S. Yaseen, Ihab El Qirem, Dima Dajani
PurposeThe research identifies the predictors of Islamic mobile banking (IMB) smart services adoption and usage in Jordan.Design/methodology/approachBased on the Unified Theory of the Acceptance and Use of Technology (UTAUT) and the Unified Theory of the Acceptance and Use of Technology 2 (UTAUT2), an extended and modified model that encompasses perceived trust was developed. The sample comprised 358 customers from Islamic banks (IBs) in Jordan, and structural equation modelling was applied to examine data drawn from the sample.FindingsThe research framework presented 0.728% of the behavioural intention variance and 0.455% of the use behaviour. Results discovered that performance expectancy, perceived trust and hedonic motivation have significant relations with behavioural intention. The finding that effort expectancy has an insignificant effect and that social influence has a significant negative influence on behavioural intention was unexpected.Research limitations/implicationsThe research has successfully verified the effect of performance expectancy, perceived trust and hedonic motivation on the customer's intention to use IMB smart services. However, the research data findings are based on the cross-sectional design.Practical implicationsThe outcomes hold implications for marketing strategy makers who are responsible for promoting IMB smart services in IBs.Originality/valueThis research presents a deeper insight into IMB adoption and use. The research employed UTAUT and UTAUT2 as the baseline model and incorporates perceived trust to estimate behavioural intention. To the best of the authors' knowledge, this could be the first inquiry that examines IMB smart services adoption and use in Jordan.
{"title":"Islamic mobile banking smart services adoption and use in Jordan","authors":"S. Yaseen, Ihab El Qirem, Dima Dajani","doi":"10.1108/ijif-04-2021-0065","DOIUrl":"https://doi.org/10.1108/ijif-04-2021-0065","url":null,"abstract":"PurposeThe research identifies the predictors of Islamic mobile banking (IMB) smart services adoption and usage in Jordan.Design/methodology/approachBased on the Unified Theory of the Acceptance and Use of Technology (UTAUT) and the Unified Theory of the Acceptance and Use of Technology 2 (UTAUT2), an extended and modified model that encompasses perceived trust was developed. The sample comprised 358 customers from Islamic banks (IBs) in Jordan, and structural equation modelling was applied to examine data drawn from the sample.FindingsThe research framework presented 0.728% of the behavioural intention variance and 0.455% of the use behaviour. Results discovered that performance expectancy, perceived trust and hedonic motivation have significant relations with behavioural intention. The finding that effort expectancy has an insignificant effect and that social influence has a significant negative influence on behavioural intention was unexpected.Research limitations/implicationsThe research has successfully verified the effect of performance expectancy, perceived trust and hedonic motivation on the customer's intention to use IMB smart services. However, the research data findings are based on the cross-sectional design.Practical implicationsThe outcomes hold implications for marketing strategy makers who are responsible for promoting IMB smart services in IBs.Originality/valueThis research presents a deeper insight into IMB adoption and use. The research employed UTAUT and UTAUT2 as the baseline model and incorporates perceived trust to estimate behavioural intention. To the best of the authors' knowledge, this could be the first inquiry that examines IMB smart services adoption and use in Jordan.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45816203","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-21DOI: 10.1108/ijif-11-2019-0175
M. Mukhlisin, Nurizal Ismail, Reza Jamilah Fikri
PurposeThis study aims to analyse whether theories and views of classical Islamic scholars are widely adopted as references in Islamic accounting and finance (IAF), Islamic economics (IE) and Islamic business management (IBM) research studies as part of their contribution to solving current economic and financial problems.Design/methodology/approachThe research adopts a qualitative meta-analysis methodology using NVivo 12 with selected data from 474 international journal articles published between 1981 and 2021. The study considers 172 IAF articles, 111 IE articles and 191 IBM articles.FindingsThe results of the study show that the use of theories and views of classical Islamic scholars is not widespread among the examined research papers. The findings show that 90% of researchers tend to acquire modern economics, management, psychological and sociological theories instead of classical theories. Both modern and classical theories have been discussed in the studied articles namely agency theory, stakeholders' theory, ḥisbah (accountability), maqāṣid al-Sharīʿah (objectives of Islamic law) and Waʿd (unilateral promise). The gaps prevail not only in the taxonomy of terms but also in the choice of paradigm references. It is found that 66% of the 474 journal articles adopt a positivist paradigm, followed by interpretivism (19%), post-structuralism (9%) and critical orientation (6%).Research limitations/implicationsThis paper considers only ABS ranking journal articles. Future research may consider other journal articles from different ranking groups such as Scopus or Thomson & Reuters.Practical implicationsThe paper sheds light on how Islamic educational institutions can develop strategies for the Integration of Knowledge (IOK) in their curriculum.Social implicationsThis paper helps to shape the Muslims' way of thinking within an Islamic worldview which will lead to an Islamic way of expressing knowledge, skill and behaviour.Originality/valueThis paper contributes to the model of IOK that has been deliberated among Islamic universities, especially those that develop IAF, IE and IBM studies.
{"title":"Mind the gap: theories in Islamic accounting and finance, Islamic economics and business management studies","authors":"M. Mukhlisin, Nurizal Ismail, Reza Jamilah Fikri","doi":"10.1108/ijif-11-2019-0175","DOIUrl":"https://doi.org/10.1108/ijif-11-2019-0175","url":null,"abstract":"PurposeThis study aims to analyse whether theories and views of classical Islamic scholars are widely adopted as references in Islamic accounting and finance (IAF), Islamic economics (IE) and Islamic business management (IBM) research studies as part of their contribution to solving current economic and financial problems.Design/methodology/approachThe research adopts a qualitative meta-analysis methodology using NVivo 12 with selected data from 474 international journal articles published between 1981 and 2021. The study considers 172 IAF articles, 111 IE articles and 191 IBM articles.FindingsThe results of the study show that the use of theories and views of classical Islamic scholars is not widespread among the examined research papers. The findings show that 90% of researchers tend to acquire modern economics, management, psychological and sociological theories instead of classical theories. Both modern and classical theories have been discussed in the studied articles namely agency theory, stakeholders' theory, ḥisbah (accountability), maqāṣid al-Sharīʿah (objectives of Islamic law) and Waʿd (unilateral promise). The gaps prevail not only in the taxonomy of terms but also in the choice of paradigm references. It is found that 66% of the 474 journal articles adopt a positivist paradigm, followed by interpretivism (19%), post-structuralism (9%) and critical orientation (6%).Research limitations/implicationsThis paper considers only ABS ranking journal articles. Future research may consider other journal articles from different ranking groups such as Scopus or Thomson & Reuters.Practical implicationsThe paper sheds light on how Islamic educational institutions can develop strategies for the Integration of Knowledge (IOK) in their curriculum.Social implicationsThis paper helps to shape the Muslims' way of thinking within an Islamic worldview which will lead to an Islamic way of expressing knowledge, skill and behaviour.Originality/valueThis paper contributes to the model of IOK that has been deliberated among Islamic universities, especially those that develop IAF, IE and IBM studies.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44183869","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-16DOI: 10.1108/ijif-05-2021-0090
Puteri Nur Farah Naadia Mohd Fauzi, Mohamad Akram Laldin
PurposeThis study aims to assess the availability of micro-takaful (micro-Islamic insurance) schemes for the protection of houses belonging to low-income groups in Malaysia.Design/methodology/approachThe study is conducted via desk research and interview discussions with representatives from takaful operators and key stakeholders.FindingsFindings of the study confirm the importance of micro-takaful as a scheme for the protection of low-income groups. Micro-takaful schemes in Malaysia are, however, skewed towards the protection of health, life and family. The study finds little industry interest in the provision of micro-takaful schemes for the protection of houses for low-income groups. This represents another important area that takaful operators should take into consideration in their planning.Research limitations/implicationsThe paper will help the Majlis Agama Islam Negeri-Negeri (MAINs), the regulator, takaful operators and government agencies such as Jabatan Wakaf, Zakat dan Haji (JAWHAR) to generate awareness and promote the offering of micro-takaful schemes for the protection of houses belonging to low-income groups in Malaysia.Practical implicationsIn light of the limited availability of micro-takaful schemes for the protection of houses for low-income groups, this study argues that takaful operators should offer and promote them.Social implicationsThe study is significant for fulfilling the need of low-income groups in Malaysia to protect their houses in the event of catastrophes so that they will not suffer significant losses. Rather, micro-takaful will assist them in improving their standard of living.Originality/valueThis study promotes the idea that it is essential to facilitate the low-income groups with appropriate coverage made available to them; micro-takaful schemes in protecting their houses and home contents, should any defined calamities occur. The outcomes are necessary for further development of micro-takaful models, specifically for the protection of properties. The developed model shall be proposed for application in the Malaysian takaful and housing industry to facilitate low-income groups to obtain protection for their household and home contents.
目的本研究旨在评估微型伊斯兰保险(微型伊斯兰保险)计划的可用性，以保护属于马来西亚低收入群体的房屋。设计/方法/方法本研究是通过案头调查和与复试运营商和主要利益相关者代表的访谈讨论进行的。研究结果证实了微税作为一项保护低收入群体的计划的重要性。然而，马来西亚的小额养老保险计划倾向于保护健康、生命和家庭。这项研究发现，工业界对为低收入群体提供保护住房的小额补贴计划兴趣不大。这是另一个重要的领域，回教经营者应考虑在他们的规划。研究局限性/意义本文将帮助Majlis Agama Islam Negeri-Negeri (mas)、监管机构、回教保险运营商和政府机构(如Jabatan Wakaf、Zakat dan Haji (JAWHAR))提高认识并促进提供微型回教保险计划，以保护属于马来西亚低收入群体的房屋。鉴于为低收入群体提供住房保护的小额回教计划的可用性有限，本研究认为，回教计划经营者应提供并推广这些计划。社会意义该研究对于满足马来西亚低收入群体在灾难发生时保护房屋的需求具有重要意义，这样他们就不会遭受重大损失。相反，小额贷款将帮助他们提高生活水平。独创性/价值本研究提倡这样一种观点，即必须为低收入群体提供适当的服务;微型保险计划，以保护他们的房子和家里的东西，如果任何确定的灾难发生。这些结果对于进一步开发微保护模型，特别是对财产的保护是必要的。建议将所开发的模型应用于马来西亚的房地产和住房行业，以帮助低收入群体获得对其家庭和家庭内容的保护。
{"title":"Micro-takāful scheme for the protection of houses belonging to low-income groups in Malaysia","authors":"Puteri Nur Farah Naadia Mohd Fauzi, Mohamad Akram Laldin","doi":"10.1108/ijif-05-2021-0090","DOIUrl":"https://doi.org/10.1108/ijif-05-2021-0090","url":null,"abstract":"PurposeThis study aims to assess the availability of micro-takaful (micro-Islamic insurance) schemes for the protection of houses belonging to low-income groups in Malaysia.Design/methodology/approachThe study is conducted via desk research and interview discussions with representatives from takaful operators and key stakeholders.FindingsFindings of the study confirm the importance of micro-takaful as a scheme for the protection of low-income groups. Micro-takaful schemes in Malaysia are, however, skewed towards the protection of health, life and family. The study finds little industry interest in the provision of micro-takaful schemes for the protection of houses for low-income groups. This represents another important area that takaful operators should take into consideration in their planning.Research limitations/implicationsThe paper will help the Majlis Agama Islam Negeri-Negeri (MAINs), the regulator, takaful operators and government agencies such as Jabatan Wakaf, Zakat dan Haji (JAWHAR) to generate awareness and promote the offering of micro-takaful schemes for the protection of houses belonging to low-income groups in Malaysia.Practical implicationsIn light of the limited availability of micro-takaful schemes for the protection of houses for low-income groups, this study argues that takaful operators should offer and promote them.Social implicationsThe study is significant for fulfilling the need of low-income groups in Malaysia to protect their houses in the event of catastrophes so that they will not suffer significant losses. Rather, micro-takaful will assist them in improving their standard of living.Originality/valueThis study promotes the idea that it is essential to facilitate the low-income groups with appropriate coverage made available to them; micro-takaful schemes in protecting their houses and home contents, should any defined calamities occur. The outcomes are necessary for further development of micro-takaful models, specifically for the protection of properties. The developed model shall be proposed for application in the Malaysian takaful and housing industry to facilitate low-income groups to obtain protection for their household and home contents.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47041939","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-05DOI: 10.1108/ijif-09-2022-260
B. S. Sairally
{"title":"Editorial","authors":"B. S. Sairally","doi":"10.1108/ijif-09-2022-260","DOIUrl":"https://doi.org/10.1108/ijif-09-2022-260","url":null,"abstract":"","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48712227","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-19DOI: 10.1108/ijif-02-2021-0042
M. Syahmi, Mohammad Taqiuddin bin Mohamad, Mohd Annuar Ramli
PurposeThere are two purposes to this study: first, to identify the status of ḥiyal (legal trick) in the offering of deposit products based on the tawarruq contract in the Malaysian Islamic banking industry and second, to identify the reasons for the widespread offering of tawarruq-based deposit products by Malaysian Islamic banks (IBs). Both aims of the study are addressed from the viewpoint of Malaysian experts in the area of Islamic banking.Design/methodology/approachThe study used a qualitative method that involved interviews with Malaysian Sharī‘ah experts and Islamic banking operations experts.FindingsThe findings show that Malaysian IBs resolved to use the tawarruq munaẓẓam contract in deposit products due to several constraints in the existing banking system and in view of customer preferences.Research limitations/implicationsThis study solely focuses on tawarruq-based deposit products in the Malaysian Islamic banking industry, with no other products explored. The focus on tawarruq-based deposit products was due to the extensive application of tawarruq in Islamic banking deposit products that had also led to accusations against Islamic banking operations from various parties.Practical implicationsThe implication of the study is that more stringent procedures are required in the offering of tawarruq-based deposit products as they are extensively utilised and have sparked controversy among Sharī‘ah scholars. Moreover, to retain Malaysia's Islamic banking reputation and trustworthiness, new and less controversial contracts must be developed.Originality/valueThis paper discussed the extensive usage of ḥiyal-based contracts such as tawarruq in Islamic banking institutions' deposit products, with justifications from Malaysian Islamic banking experts. The widespread use of the tawarruq munaẓẓam contract in deposit-based product offerings is based on a reasonable view considering the constraints that Malaysian Islamic banking is currently facing, with strict operation procedures by Bank Negara Malaysia to ensure real operations and to avoid fictitious elements. This paper reveals the use of tawarruq munaẓẓam in deposit products which allows the Islamic banking industry to operate effectively under Malaysia's dominant conventional banking system.
{"title":"Experts' views on ḥiyal in the Malaysian Islamic banks': the case of tawarruq-based deposit products","authors":"M. Syahmi, Mohammad Taqiuddin bin Mohamad, Mohd Annuar Ramli","doi":"10.1108/ijif-02-2021-0042","DOIUrl":"https://doi.org/10.1108/ijif-02-2021-0042","url":null,"abstract":"PurposeThere are two purposes to this study: first, to identify the status of ḥiyal (legal trick) in the offering of deposit products based on the tawarruq contract in the Malaysian Islamic banking industry and second, to identify the reasons for the widespread offering of tawarruq-based deposit products by Malaysian Islamic banks (IBs). Both aims of the study are addressed from the viewpoint of Malaysian experts in the area of Islamic banking.Design/methodology/approachThe study used a qualitative method that involved interviews with Malaysian Sharī‘ah experts and Islamic banking operations experts.FindingsThe findings show that Malaysian IBs resolved to use the tawarruq munaẓẓam contract in deposit products due to several constraints in the existing banking system and in view of customer preferences.Research limitations/implicationsThis study solely focuses on tawarruq-based deposit products in the Malaysian Islamic banking industry, with no other products explored. The focus on tawarruq-based deposit products was due to the extensive application of tawarruq in Islamic banking deposit products that had also led to accusations against Islamic banking operations from various parties.Practical implicationsThe implication of the study is that more stringent procedures are required in the offering of tawarruq-based deposit products as they are extensively utilised and have sparked controversy among Sharī‘ah scholars. Moreover, to retain Malaysia's Islamic banking reputation and trustworthiness, new and less controversial contracts must be developed.Originality/valueThis paper discussed the extensive usage of ḥiyal-based contracts such as tawarruq in Islamic banking institutions' deposit products, with justifications from Malaysian Islamic banking experts. The widespread use of the tawarruq munaẓẓam contract in deposit-based product offerings is based on a reasonable view considering the constraints that Malaysian Islamic banking is currently facing, with strict operation procedures by Bank Negara Malaysia to ensure real operations and to avoid fictitious elements. This paper reveals the use of tawarruq munaẓẓam in deposit products which allows the Islamic banking industry to operate effectively under Malaysia's dominant conventional banking system.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46374909","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-08DOI: 10.1108/ijif-02-2021-0040
Mahdi Ghaemi Asl, Mohammad Ghasemi Doudkanlou
PurposeThis study aimed to identify and compare the measurement models of earnings management (EM) appropriate to the Iranian Islamic banking system. The importance of reported profit figures has motivated business executives, who also perform financial reporting, to manipulate these figures. These measures are referred to as “earnings management,” which negatively influence the quality of reported earnings and financial statements' reliability. The number of resources available to banks and their specific operational sensitivities doubles the importance of EM in this industry.Design/methodology/approachIn this study, four methods, namely, Jones (1991), modified Jones (Dechow et al., 1995), Kasznik (1999) and Kothari et al. (2005), were used to measure the EM index in 25 Iranian Islamic banks (IBs) registered with the Tehran Stock Exchange and/or the Central Bank of Iran. The study covered the period 2005–2020. Following the aforementioned methods, this research implemented templates that were repeatedly tested in subsequent studies using accruals to discover EM.FindingsThe results show that the Kasznik (1999) model is the preferred and compatible model with the Iranian Islamic banking system's accrual behaviour due to the consistency of the measurement coefficients with theoretical and previous research findings. Therefore, total accruals, including discretionary accruals and non-discretionary accruals, have the most correspondence with (1) property, machinery and equipment; (2) the change in cash flow from operating activities; and (3) the difference of change in revenue (ΔREV) and change in net receivable accounts (ΔREC).Originality/valueThis is the first investigation in the Iranian Islamic banking system. The research contributes to the Iranian Islamic banking system literature on the implements of EM, which could be appealed to in the context of developing countries like Iran. Finally, this study highlights the different EM capabilities in Islamic banking systems similar to the Iranian banking arrangement.
本研究旨在识别和比较适合伊朗伊斯兰银行体系的盈余管理(EM)计量模型。报告的利润数据的重要性促使企业高管操纵这些数据，他们也执行财务报告。这些措施被称为“盈余管理”，对报告盈余的质量和财务报表的可靠性产生负面影响。银行可获得的资源数量及其特定的运营敏感性使新兴市场在该行业的重要性增加了一倍。本研究采用Jones(1991)、modified Jones (Dechow et al.， 1995)、Kasznik(1999)和Kothari et al.(2005)四种方法，测量在德黑兰证券交易所和/或伊朗中央银行注册的25家伊朗伊斯兰银行(ib)的新兴市场指数。该研究涵盖了2005-2020年。根据上述方法，本研究实施了模板，这些模板在随后的研究中被反复测试，使用应计制来发现em。研究结果表明，由于测量系数与理论和先前的研究结果一致，Kasznik(1999)模型是伊朗伊斯兰银行系统应计制行为的首选和兼容模型。因此，应计项目总额，包括可支配性应计项目和非可支配性应计项目，与(1)财产、机器和设备最为对应;(二)经营活动现金流量的变化情况;(3)收入变动(ΔREV)与应收帐款净额变动(ΔREC)之差。这是对伊朗伊斯兰银行体系的首次调查。该研究为伊朗伊斯兰银行系统关于新兴市场实施的文献做出了贡献，可以在伊朗等发展中国家的背景下提出上诉。最后，本研究强调了类似于伊朗银行业安排的伊斯兰银行体系中不同的新兴市场能力。
{"title":"How do Islamic banks manage earnings? Application of various measurement models in the Iranian Islamic banking system","authors":"Mahdi Ghaemi Asl, Mohammad Ghasemi Doudkanlou","doi":"10.1108/ijif-02-2021-0040","DOIUrl":"https://doi.org/10.1108/ijif-02-2021-0040","url":null,"abstract":"PurposeThis study aimed to identify and compare the measurement models of earnings management (EM) appropriate to the Iranian Islamic banking system. The importance of reported profit figures has motivated business executives, who also perform financial reporting, to manipulate these figures. These measures are referred to as “earnings management,” which negatively influence the quality of reported earnings and financial statements' reliability. The number of resources available to banks and their specific operational sensitivities doubles the importance of EM in this industry.Design/methodology/approachIn this study, four methods, namely, Jones (1991), modified Jones (Dechow et al., 1995), Kasznik (1999) and Kothari et al. (2005), were used to measure the EM index in 25 Iranian Islamic banks (IBs) registered with the Tehran Stock Exchange and/or the Central Bank of Iran. The study covered the period 2005–2020. Following the aforementioned methods, this research implemented templates that were repeatedly tested in subsequent studies using accruals to discover EM.FindingsThe results show that the Kasznik (1999) model is the preferred and compatible model with the Iranian Islamic banking system's accrual behaviour due to the consistency of the measurement coefficients with theoretical and previous research findings. Therefore, total accruals, including discretionary accruals and non-discretionary accruals, have the most correspondence with (1) property, machinery and equipment; (2) the change in cash flow from operating activities; and (3) the difference of change in revenue (ΔREV) and change in net receivable accounts (ΔREC).Originality/valueThis is the first investigation in the Iranian Islamic banking system. The research contributes to the Iranian Islamic banking system literature on the implements of EM, which could be appealed to in the context of developing countries like Iran. Finally, this study highlights the different EM capabilities in Islamic banking systems similar to the Iranian banking arrangement.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47847574","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-12DOI: 10.1108/ijif-04-2021-0074
Syed Marwan Mujahid Syed Azman, S. Ismail, M. Haneef, Engku Rabiah Adawiyah Engku Ali
PurposeThe objectives of this paper are two-fold: first, to empirically compare and contrast the salient features of three financial instruments (FIs), namely sustainable and responsible investment (SRI) sukuk, social impact bonds (SIBs) and conventional bonds (CBs) and second, to examine the differences between the perceptions of the investors and the developers on the features of the three FIs.Design/methodology/approachUsing a questionnaire survey, 251 completed and useable responses were received, representing a 42.54% response rate. In examining the differences and similarities in the characteristics of the three FIs, the inferential statistical of frequency and percentage were used. Wilcoxon test and Mann–Whitney tests were conducted to investigate the differences in the salient features of the three FIs and the differences between the investors and developers' perceptions on the salient features of SRI, SIBs and CBs, respectively.FindingsThe results reveal that stakeholders view SRI Sukuk, SIBs and CBs to be statistically significantly different from each other. This shows that stakeholders do not view SRI sukuk as “old wine in a new Shariah-compliant bottle” but instead considered different from SIBs and CBs. Furthermore, stakeholders also differentiate between SIBs and CBs.Originality/valueThe paper provides empirical evidence that Islamic finance (IF) instrument, represented by SRI sukuk, is viewed as different instruments to conventional tools, represented by SIBs and CBs. First, it debunks the notion that IF is viewed as similar to its conventional counterpart. Second, SIBs are seen as different from CBs, illustrating the distinct categorisation of impact investing instruments. As such, third, the development of SRI sukuk and SIBs can provide diversification to portfolios as it is a unique instrument in the social finance and financial market.
{"title":"An empirical comparison of sustainable and responsible investment ṣukūk, social impact bonds and conventional bonds","authors":"Syed Marwan Mujahid Syed Azman, S. Ismail, M. Haneef, Engku Rabiah Adawiyah Engku Ali","doi":"10.1108/ijif-04-2021-0074","DOIUrl":"https://doi.org/10.1108/ijif-04-2021-0074","url":null,"abstract":"PurposeThe objectives of this paper are two-fold: first, to empirically compare and contrast the salient features of three financial instruments (FIs), namely sustainable and responsible investment (SRI) sukuk, social impact bonds (SIBs) and conventional bonds (CBs) and second, to examine the differences between the perceptions of the investors and the developers on the features of the three FIs.Design/methodology/approachUsing a questionnaire survey, 251 completed and useable responses were received, representing a 42.54% response rate. In examining the differences and similarities in the characteristics of the three FIs, the inferential statistical of frequency and percentage were used. Wilcoxon test and Mann–Whitney tests were conducted to investigate the differences in the salient features of the three FIs and the differences between the investors and developers' perceptions on the salient features of SRI, SIBs and CBs, respectively.FindingsThe results reveal that stakeholders view SRI Sukuk, SIBs and CBs to be statistically significantly different from each other. This shows that stakeholders do not view SRI sukuk as “old wine in a new Shariah-compliant bottle” but instead considered different from SIBs and CBs. Furthermore, stakeholders also differentiate between SIBs and CBs.Originality/valueThe paper provides empirical evidence that Islamic finance (IF) instrument, represented by SRI sukuk, is viewed as different instruments to conventional tools, represented by SIBs and CBs. First, it debunks the notion that IF is viewed as similar to its conventional counterpart. Second, SIBs are seen as different from CBs, illustrating the distinct categorisation of impact investing instruments. As such, third, the development of SRI sukuk and SIBs can provide diversification to portfolios as it is a unique instrument in the social finance and financial market.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41800813","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-01DOI: 10.1108/ijif-02-2021-0038
Ahmed Badreldin
PurposeThis study aims to quantify the cost of rebalancing Sharīʿah-compliant indexes, both economically and statistically.Design/methodology/approachAn empirical approach is employed where the rebalanced Sharīʿah-compliant index is calculated numerous times with different lags in rebalancing, and the number of stocks and their cost across time are determined in order to identify the optimal rebalancing frequency.FindingsThis paper finds that annual Sharīʿah rebalancing does not lead to significant differences in portfolio returns, even though it does bring some advantages in cumulative wealth starting from the third year onwards and brings about better risk-return ˗characteristics measured in terms of the Sharpe ratio. However, these advantages involve an average annual shifting between 30 and 60% of the portfolio market capitalization, which would be costly at any level of transaction costs.Practical implicationsA private investor may be better off holding a constant portfolio and only rebalancing in three-year intervals since this was shown to possess similar portfolio returns and cumulative wealth results. Any advantages of annual rebalancing in terms of risk-return characteristics may be offset by transaction costs of rebalancing. Sharīʿah scholars and practitioners are to determine when the correct time for rebalancing really is, taking into consideration the cost of rebalancing vis-à-vis the advantages in cumulative wealth and risk-return characteristics of the portfolio.Originality/valuePredictions that Islamic indexes will perform well during financial crises, such as the COVID-19 pandemic, miss the cost of frequent rebalancing. This paper addresses this issue in an empirical manner learning from the previous crisis in 2008.
{"title":"The cost of constituent-rebalancing of Sharīʿah-compliant indexes: lessons for future crises","authors":"Ahmed Badreldin","doi":"10.1108/ijif-02-2021-0038","DOIUrl":"https://doi.org/10.1108/ijif-02-2021-0038","url":null,"abstract":"PurposeThis study aims to quantify the cost of rebalancing Sharīʿah-compliant indexes, both economically and statistically.Design/methodology/approachAn empirical approach is employed where the rebalanced Sharīʿah-compliant index is calculated numerous times with different lags in rebalancing, and the number of stocks and their cost across time are determined in order to identify the optimal rebalancing frequency.FindingsThis paper finds that annual Sharīʿah rebalancing does not lead to significant differences in portfolio returns, even though it does bring some advantages in cumulative wealth starting from the third year onwards and brings about better risk-return ˗characteristics measured in terms of the Sharpe ratio. However, these advantages involve an average annual shifting between 30 and 60% of the portfolio market capitalization, which would be costly at any level of transaction costs.Practical implicationsA private investor may be better off holding a constant portfolio and only rebalancing in three-year intervals since this was shown to possess similar portfolio returns and cumulative wealth results. Any advantages of annual rebalancing in terms of risk-return characteristics may be offset by transaction costs of rebalancing. Sharīʿah scholars and practitioners are to determine when the correct time for rebalancing really is, taking into consideration the cost of rebalancing vis-à-vis the advantages in cumulative wealth and risk-return characteristics of the portfolio.Originality/valuePredictions that Islamic indexes will perform well during financial crises, such as the COVID-19 pandemic, miss the cost of frequent rebalancing. This paper addresses this issue in an empirical manner learning from the previous crisis in 2008.","PeriodicalId":54072,"journal":{"name":"ISRA International Journal of Islamic Finance","volume":" ","pages":""},"PeriodicalIF":2.3,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42849016","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-29DOI: 10.1108/ijif-04-2020-0071
Said Bouheraoua, Fares Djafri
Purpose
Islamic financial institutions (IFIs) are required to establish a Shariīʿah Governance Framework (SGF) to strengthen their Sharīʿah-compliance mechanism and ensure that all relevant IFI regulations are in line with Sharīʿah rules and principles. Effective implementation of the Shariīʿah-compliance function will further promote stakeholder confidence, as well as the integrity of IFIs, by reducing Shariīʿah non-compliance risks. This study aims to examine the internal control framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and explore the extent to which it can be incorporated in the Sharīʿah-compliance function of IFIs.
Design/methodology/approach
This study adopts a qualitative method of inquiry, utilizing the inductive method and content analysis to build comprehensive knowledge that will assist in exploring the framework of COSO methodology and the extent to which it can be adopted by IFIs.
Findings
The findings indicate that the existing frameworks of Sharīʿah governance, whether that of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) or Bank Negara Malaysia (BNM), need to be further developed. Therefore, the adoption of COSO methodology in the internal Sharīʿah audit of IFIs, as suggested by AAOIFI, is not only possible but desirable. The study also finds that the COSO framework places the highest priority on risk management in that it makes it an integral part of the decision-making process in all the institution's activities. As a result, incorporating the comprehensive COSO risk management structure within the Sharīʿah-compliance function will enhance risk management in IFIs.
Originality/value
This study highlights the importance of the COSO internal control framework and examines its components, principles and the possibility of its adoption by IFIs. The findings of this study are expected to contribute to enhancing the Sharīʿah-compliance function of IFIs.
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