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Publication date: 7 January 2019

Nor Farizal Mohammed, Fadzlina Mohd Fahmi and Asyaari Elmiza Ahmad

The purpose of this paper is to examine views of financial statements preparers with regard to the practices in reporting Islamic Financial Institutions (IFIs), thereby…

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Abstract

Purpose

The purpose of this paper is to examine views of financial statements preparers with regard to the practices in reporting Islamic Financial Institutions (IFIs), thereby contributing to answer whether there is indeed a need for a separate set of Islamic accounting standards for IFIs.

Design/methodology/approach

Drawing upon seven in-depth semi-structured interviews conducted with IFIs’ leading officers who are highly involved in preparing financial statements in Malaysia, the paper offers evidence on the current stance of reporting the operation of IFIs, the influence of AAOIFI accounting standards and the feasible application of IFRSs in reporting IFIs.

Findings

While it is shown that most of the interviewees admit the feasibility of IFRSs in reporting IFIs, many interviewees placed greater emphasis on the spirit of Islam based on Islamic contract. In that case, the findings show that to convince the public that they offer Shariah compliance products approved by Shariah Advisory Council, there is a need for specificity guidelines or standards for IFIs within the IFRS framework. The main concern raised in the paper is that separate Islamic accounting standard is not needed, instead the option needs to be within the IFRS framework with the collaboration work of Accounting and Auditing for Islamic Financial Institutions (AAOIFI) and the International Accounting Standard Board (IASB).

Originality/value

With the recent rapid growth of IFIs, this paper contributes regarding the inconclusive stance on the need for specificity accounting standards for IFIs such as the ones issued by AAOIFI. It adds to the current body of knowledge by highlighting the collaboration of the AAOIFI and the IASB for the intended specific guidelines for IFIs to be accepted globally.

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Article
Publication date: 1 September 2009

Adibah Jamaluddin, Nor’Azam Mastuki and Asyaari Elmiza Ahmad

This paper examines the effect of corporate governance reform on the value relevance of equity book value and earnings by employing the Ohlson’s (1995) Valuation Model, and it is…

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Abstract

This paper examines the effect of corporate governance reform on the value relevance of equity book value and earnings by employing the Ohlson’s (1995) Valuation Model, and it is based on the methodology developed by Davis‐Friday et al. (2006). The sample consists of Main Board companies listed on Bursa Malaysia from 1999 to 2001 in order to investigate the effect during and after the issuance of the Malaysian Code on Corporate Governance (MCCG) as a measure of corporate governance reform. The findings generally indicate that equity book value and earnings are value relevant in assisting investors to value firms’ equity. Findings of this study, nonetheless, show that the regulatory change experienced by the country did not have an impact on the valuation of equity book value and earnings. This, thus, suggests that most of the Malaysian companies may not have met the intended purpose of MCCG, but merely conformed to the minimum requirement. In summary, the findings of this study provide evidence that the equity book value and earnings reported in the financial statement is value relevant in valuing Malaysian firms’ equity.

Details

Journal of Financial Reporting and Accounting, vol. 7 no. 2
Type: Research Article
ISSN: 1985-2517

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