Corporate governance and compliance with AAOIFI governance standards by Islamic banks
International Journal of Islamic and Middle Eastern Finance and Management
ISSN: 1753-8394
Article publication date: 3 September 2020
Issue publication date: 1 November 2020
Abstract
Purpose
This study aims to examine the effect of the main corporate governance characteristics on compliance with accounting and auditing organisation for Islamic financial institutions’ (AAOIFI) governance standards’ (GSs) disclosure requirements by Islamic banks (IB) that adopt AAOIFIs’ standards in Bahrain, Qatar, Jordan, Oman, Syria, Sudan, Palestine and Yemen.
Design/methodology/approach
The sample consists of 486 bank-year observations from 2009 to 2017.
Findings
The findings reveal that compliance with AAOIFIs’ GSs’ disclosure requirements is positively influenced by the audit committee (AC) independence, AC’s accounting and financial expertise and industry expertise, auditor industry specialisation, IB’s size and IB’s listing status. On the other hand, it is negatively influenced by the ownership concentration.
Research limitations/implications
This study has only examined compliance with AAOIFI’s GSs’ disclosure requirements and has focussed on one major sector of the Islamic financial institutions (which is IB).
Practical implications
The findings are useful for various groups of preparers and users of IBs’ annual reports such as academics and researchers, accountants, management of IBs and some organisations.
Originality/value
While the study of the AAOIFIs’ standards has grown contemporary with considerable contributions from scholars, however, the majority of these studies are descriptive in nature. Indeed, the existing literature that has explored the determinants of compliance with AAOIFI’s standards is in the early research stage. To the best of the knowledge, there is a paucity of empirical research testing this issue.
Keywords
Citation
Mnif, Y. and Tahari, M. (2020), "Corporate governance and compliance with AAOIFI governance standards by Islamic banks", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 13 No. 5, pp. 891-918. https://doi.org/10.1108/IMEFM-03-2019-0123
Publisher
:Emerald Publishing Limited
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