Compliance of AAOIFI Guidelines in General Presentation and Disclosure in the Financial Statements of Islamic Banks in Bangladesh (original) (raw)
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Conformity Level of AAOIFI Accounting Standards by Six Islamic Banks of Bangladesh
The International Journal of Excellence in Islamic Banking and Finance, 2015
In response to this global rise in Islamic financial organism and banking, the need for setting up a common standard for the accounting function in Islamic Banks, became an unuttered need. Addressing this need, in the year 1991, the global institute for setting accounting standards for Islamic financial institutes, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has been established in Bahrain. This study tries to find out the conformity level of the Islamic Banks in Bangladesh with these standards. This study analyses the annual reports of six Islamic banks from Bangladesh of the year 2012. The Reports are collected from the Banks' website sources. It is found that these six banks conform with the AAOIFI standards by 53.79% on average in financial statements. A 2.79 standard deviation in case of total conformity refers to the low level of difference among these banks in case of disclosure. This study suggests that it is highly of importance for the banks to increase the level of conformity of the AAOIFI standards to ensure the stakeholders about their sincerity and determination to comply with Islamic Shari'ah. Analysis of AAOFI standard compliance is relatively new in Bangladesh. This research study may provide some new insights into the existing Islamic literature.
SEISENSE Journal of Management, 2019
Objective-This study intends to investigate the extent of voluntary financial reporting compliance made by Islamic banks of Pakistan as suggested by Islamic accounting standards (i.e. AAOIFI). Design/Methodology-The study is based on an empirical evaluation of financial statements of Islamic banks of Pakistan. Data sample consists of financial statements for the years 2009, 2015, 2016 and 2017 relating to of all four full-fledged Islamic banks in Pakistan. The first standard in Islamic accounting standards suggests a total of 111 items for compliance while preparing financial statement of Islamic Banks. As per existing regulatory requirements, Islamic banks in Pakistan are required to adopt International Financial Reporting Standards while preparing their financial statements. Findings-However, the analysis suggests Islamic banks in Pakistan are in compliance of more than 50% of requirements as suggested by Islamic accounting standards. Implications-The insights will help the industry decision makers to increase the voluntary disclosures by the Islamic banks.
International Journal of Economics, Business and Accounting Research (IJEBAR)
Compliance with financial reporting guidelines/standards promulgated by Regulatory Bodies has become a crucial issue of the day after a series of corporate debacles over a few years. Regulators, professional bodies and researchers throughout the world have expressed their concern about the need for improved accounting pronouncements and compliance for providing better information than previously required for the preparation and presentation of corporate financial reporting. The present study primarily focuses on the reporting disclosure levels and compliance with Bangladesh Bank (BB) Guidelines, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Accounting Standard, Bangladesh/International Financial Reporting Standard (B/IFRS) and Securities and Exchange Commission (SEC) Rules of Islamic Financial Institutions in Bangladesh. Annual reports of (08) eight Islamic banks in Bangladesh have been examined for the year ending 2015. The results showed that the...
Compliance of Financial Statements of Islamic Banks of Pakistan with AAOIFI Guidelines in Gene.pdf
Compliance of Financial Statements of Islamic Banks of Pakistan with AAOIFI Guidelines in General Presentation and Disclosure , 2019
Objective - This study intends to investigate the extent of voluntary financial reporting compliance made by Islamic banks of Pakistan as suggested by Islamic accounting standards (i.e. AAOIFI). Design/Methodology - The study is based on an empirical evaluation of financial statements of Islamic banks of Pakistan. Data sample consists of financial statements for the years 2009, 2015, 2016 and 2017 relating to of all four full-fledged Islamic banks in Pakistan. The first standard in Islamic accounting standards suggests a total of 111 items for compliance while preparing a financial statement of Islamic Banks. As per existing regulatory requirements, Islamic banks in Pakistan are required to adopt International Financial Reporting Standards while preparing their financial statements. Findings - However, the analysis suggests Islamic banks in Pakistan are in compliance of more than 50% of requirements as suggested by Islamic accounting standards. Implications – The insights will help the industry decision makers to increase the voluntary disclosures by the Islamic banks.
Critical Evaluation of Disclosure in Annual Reports of Islamic Banks in Bangladesh
The present is a critical evaluation of the disclosure practices of the annual reports of Islamic banks in Bangladesh. The study identified 144 disclosure factors required complying by the Islamic banks under traditional and Shari`ah regulations. These factors were classified into nine including Company Profile Items (7), Accounting Policy Items (12), Balance Sheet Items (Assets) (18), Balance Sheet Items (Liabilities) (15), Income Statement Items (Cr.) (9), Income Statement Items (Dr.)(11), Ratios, Statistics and other Details (18), Projections and Budgetary Disclosure (27) and finally Measurement and Valuation Method (27). The study found that on an average, Islamic banks complied the highest 94.28% in case of Company Profile Items and the lowest 38.57% in case of Projections and Budgetary Disclosure. The study suggested giving importance in all the segments of disclosure for quality reporting and disclosing maximum information in their annual report maintaining quality in all the areas as Islam always gives emphasis on full disclosure so that the users of their report can get their required information of the Islamic banks in Bangladesh.
The compliance of disclosure with AAOIFI financial accounting standards
Purpose-This paper aims to examine the compliance of disclosure with the financial accounting standards of the Accounting and Auditing Organisation for Islamic Financial Institutions' (AAOIFI) related to Islamic financing products by Islamic banks in Bahrain and Qatar. Design/methodology/approach-The study measures compliance using disclosure indexes. The disclosure indexes include the three financial accounting standards of Murabaha, Mudaraba and Musharaka. The data are collected from the annual reports of 24 Islamic banks in Bahrain and Qatar over a period of 2012-2015. Findings-The paper found that Islamic banks in Bahrain and Qatar comply with AAOIFI financial accounting standards related to Murabaha, Mudaraba and Musharaka. However, there was a level of noncompliance in both countries. In addition, it found that the extent of compliance had increased over the 2012-2015 period. Also, the Murabaha standard had the highest mean of compliance. Moreover, the results showed that the Islamic banks in Qatar tend to have more compliance of overall Murabaha and Mudaraba disclosures compared to the Islamic banks in Bahrain. Research limitations/implications-The findings are preliminary and highlight that the issue is of high interest to Islamic banks and AAOIFI. Hence, it requires a detailed follow-up to form a complete picture that would assist AAOIFI and regulators gear their policies toward better quality disclosure by Islamic financial institutions. Even though the findings are encouraging, future research is recommended to enforce compliance with the AAOIFI financial accounting standards. Originality/value-This is a pioneer empirical study that focuses on the level and trend of compliance with AAOIFI financial accounting standards related to the Islamic financing products of Murabaha, Mudaraba and
Evaluation of Financial Reporting System in Islamic Banks in Bangladesh
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Quality of Disclosure of Islamic Banks in Bangladesh: Evidence from a Survey
Accounting and financial reports of the corporations are primarily prepared for the external users of the information and therefore such reports should be designed, in form and content, according to the needs of the external users. Hence the perceptions of the users of accounting information regarding various aspects of the reports are to be assessed frequently to improve the quality of accounting information of the public limited companies. The present study is an attempt to justify the qualitative characteristics of accounting infor-mation of Islamic banks in Bangladesh on the basis of the opinion of the users of that information; to test whether there is any significant difference in opinion of them in this regard and to identify whether there is any problem of quality in accounting information provided by Islamic banks in Bangladesh.
Journal of Islamic Accounting and Business Research, 2018
Purpose-This paper aims to examine the compliance of disclosure with the financial accounting standards of the Accounting and Auditing Organisation for Islamic Financial Institutions' (AAOIFI) related to Islamic financing products by Islamic banks in Bahrain and Qatar. Design/methodology/approach-The study measures compliance using disclosure indexes. The disclosure indexes include the three financial accounting standards of Murabaha, Mudaraba and Musharaka. The data are collected from the annual reports of 24 Islamic banks in Bahrain and Qatar over a period of 2012-2015. Findings-The paper found that Islamic banks in Bahrain and Qatar comply with AAOIFI financial accounting standards related to Murabaha, Mudaraba and Musharaka. However, there was a level of non-compliance in both countries. In addition, it found that the extent of compliance had increased over the 2012-2015 period. Also, the Murabaha standard had the highest mean of compliance. Moreover, the results showed that the Islamic banks in Qatar tend to have more compliance of overall Murabaha and Mudaraba disclosures compared to the Islamic banks in Bahrain. Research limitations/implications-The findings are preliminary and highlight that the issue is of high interest to Islamic banks and AAOIFI. Hence, it requires a detailed follow-up to form a complete picture that would assist AAOIFI and regulators gear their policies toward better quality disclosure by Islamic financial institutions. Even though the findings are encouraging, future research is recommended to enforce compliance with the AAOIFI financial accounting standards. Originality/value-This is a pioneer empirical study that focuses on the level and trend of compliance with AAOIFI financial accounting standards related to the Islamic financing products of Murabaha, Mudaraba and Musharaka standards, especially in Qatar. Additionally, it is the first study comparing between the only two Gulf Cooperation Council (GCC) countries, i.e. Bahrain and Qatar, that mandatory apply the AAOIFI standards.