Shariadisclosures

Anna Che Azmi, Norazlin Ab Aziz, Normawati Non and Rusnah Muhamad

Journal of Islamic Accounting and Business Research, 2016, vol. 7, issue 3, 237-252

Abstract: Purpose - This paper aims to examine the reasons behind the low level ofSharia-related disclosures, particularlySharia-compliant companies, to gain an understanding on how these companies discloseSharia-related information in their annual reports, and how professional users of these reports search for such disclosures. Design/methodology/approach - The study is an exploratory research based on structured interviews with individuals involved in the preparation of annual reports ofSharia-compliant companies and professional users of annual reports. Findings - MostSharia-compliant companies and professional users interviewed agree that the most relevantSharia-related information is most commonly understood as the information found in the financial statement and its notes (accounting-related disclosures). Their responses indicate that there is a disjoint between the conventional disclosure practices on corporate social responsibility items and theSharia-related information. Research limitations/implications - The idea of full disclosure needs to be further understood from the perspectives ofSharia. This study provides insights into the types ofSharia-related information that are important for disclosure. Future research should focus on examining a larger number of companies and interviewing more professional users from different jurisdictions to generate more knowledge about the nature ofShariainformation and its disclosure. Practical implications - Users of theShariascreening methods, especially regulators, such as the Securities Commission Malaysia should encourage the disclosure of the required aspects ofShariain the annual reports ofSharia-compliant companies, as professional users are interested in this type of information. Originality/value - This study offers insights into the reasons behind lowShariadisclosures in annual reports ofSharia-compliant companies.

Keywords: Corporate social responsibility; Sharia disclosures; Sharia-compliant companies; Socially responsible investing (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-03-2016-0029

DOI: 10.1108/JIABR-03-2016-0029

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