 Social disclosure: compliance of Islamic banks to governance standards No. 7 of AAOIFI (2010)Nouha Ben Brahim and Mounira Ben Arab Journal of Islamic Accounting and Business Research, 2020, vol. 11, issue 7, 1427-1452 Abstract: Purpose - This paper aims to investigate the compliance of Islamic banks (IBs) with the AAOIFI standard No. 7, in Middle East and North Africa area during the period 2010-2014. The authors seek to identify, among the 15 countries and 72 banks, those which conform more to this standard. The level of compliance is expected to be more stringent in countries where AAOIFI standards are made mandatory. Design/methodology/approach - The paper uses the unweighted disclosure method which measures the corporate social report disclosure (CSRD) score of a bank as additive. Each country and bank are assessed according to two obligatory and voluntary CSRDs. Findings - The empirical results indicate that even though the global disclosure index has been improved over the observation period, it has remained relatively low. The results also allowed us to see that the global, mandatory and voluntary societal disclosures vary according to the country and banks. Further, it has been seen that banks allow more attention to the mandatory disclosure recommendations of AAOIFI Governance Standard No. 7, in comparison with the voluntary CSRD. Research limitations/implications - One limitation of this study is that the sample is restricted to only the Islamic banking sector. Future research could include other Islamic financial institutions (IFIs) such as insurance companies. Second, the study could be extended to other countries to better control the religious system and cultural effects. Because in our modern era, traditional laws in the Muslim world have been widely replaced by statutes inspired by European models, the authors suggest then to apply a new classification that separates, for instance, countries that rely on an Islamic model from those with a western model, and national banks from those allied with western banks. Finally, the paper’s data collection relies solely on annual reports and does not include publications from bank sites. Future research could consider all these limitations. Another possible avenue could examine the determinants of such disclosure level. Practical implications - Almost no study has been limited to the text of the AOIFFI. This detail is important for some countries where the AAOIFI standards are mandatory. Social implications - The findings may be of interest to shareholders and all those who deal with IBs that have religious expectations. Originality/value - Despite the fact that most studies investigated compliance of IB Sharia law, almost no study has been limited to the text of the AOIFFI. This detail is important for some countries where the AAOIFI standards are mandatory. The findings may be of interest to shareholders and all those who deal with IBs that have religious expectations. Keywords: Islamic banks; AAOIFI; Social accountability; CSRD (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-12-2018-0199 DOI: 10.1108/JIABR-12-2018-0199 Access Statistics for this article Journal of Islamic Accounting and Business Research is currently edited by Dr Mohammad Hudaib and Prof Roszaini Haniffa More articles in Journal of Islamic Accounting and Business Research from Emerald Group Publishing Limited |
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