Shamsiah Mohamad, Mezbah Uddin Ahmed and Mohd Bahroddin Badri
The purpose of this paper is to analyze the different features of preference shares from accounting and Sharīʿah perspectives. It also aims to study Sharīʿah issues arising from…
Abstract
Purpose
The purpose of this paper is to analyze the different features of preference shares from accounting and Sharīʿah perspectives. It also aims to study Sharīʿah issues arising from preference shares and to subsequently propose solutions for identified issues that will help in structuring Islamic preference shares.
Design/methodology/approach
The paper uses a qualitative method by analyzing relevant documents and literature to understand the subject matter and Sharīʿah-related issues.
Findings
The paper finds that several features of conventional preference shares, such as capital guarantee, loss sharing disproportionate to capital contribution, fixed profit, profit guarantee and waiver of rights before realization of profit, make them a Sharīʿah non-compliant instrument.
Research limitations/implications
The paper is conceptual in nature; however, it provides directions for future empirical research.
Originality/value
The paper provides a practicable solution to structure Sharīʿah-compliant preference shares.
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Syed Musa Alhabshi, Hafiz Majdi Ab Rashid, Sharifah Khadijah Syed Agil and Mezbah Uddin Ahmed
This paper aims to address the financial reporting dimensions of intangible assets with specific reference to International Accounting Standards (IAS) 38 as well as relevant…
Abstract
Purpose
This paper aims to address the financial reporting dimensions of intangible assets with specific reference to International Accounting Standards (IAS) 38 as well as relevant International Financial Reporting Standards (IAS 38 exclusion) that are embedded within intangible assets. These have implications for Islamic financial assets with identifiable and measurable intangible components.
Design/methodology/approach
The study uses the qualitative research method by way of interviews followed by focus group discussions with professional accountants/accounting academics and Sharīʿah scholars/advisors from academia, the industry and regulatory bodies. Analysis of relevant literature is made to understand the subject matter and Sharīʿah-related issues.
Findings
The study observes that the accounting dimensions of tangible assets are generally consistent with Sharīʿah requirements. However, significant variation arises when the dimensions of intangible assets are represented in financial assets.
Research limitations/implications
The paper presents an exploratory in-depth analysis within the context of intangible assets as specified in IAS 38.
Originality/value
The paper elucidates the comparative accounting dimensions and Sharīʿah requirements in reporting financial assets.
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Md. Kausar Alam, Abu Umar Faruq Ahmad, Mezbah Uddin Ahmed and Md. Salah Uddin
The study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the…
Abstract
Purpose
The study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the relevant areas.
Design/methodology/approach
This research applied a qualitative method, and data were collected through conducting semi-structured interviews in Bangladesh. A total of 17 interviews were conducted for accomplishing the research objectives.
Findings
The study finds that there is no comprehensive Shariah audit manual in the current operation for IBs in Bangladesh, and as such, the requirements of their Shariah compliance remain a big question. Although the Shariah audit is conducted within IBs, and the Shariah audit officers or Shariah officers inspect necessary documents while conducting the Shariah audit, they only cover 10–20% of total investments and transactions. Based on the findings of this study, it is recommended that the Shariah auditing tasks should broadly cover at least 80% of the investment portfolios, documents and financial contracts and activities.
Research limitations/implications
The findings of this research are expected to significantly contribute to the regulatory authorities concerned in Bangladesh and beyond, which include the suggestions that IBs can adopt to strengthen their Shariah governance system. The study also pinpoints that in the current system, Shariah auditors' roles are somehow limited in examining and checking the investment sides with a minimal portion (10–20%), for which they are unable to perform their responsibilities in a befitting manner to provide assurance services and overall Shariah compliance of IBs activities.
Practical implications
This study explores the current Shariah audit systems and provides recommendations to improve the existing systems which will be beneficial for Islamic banks of Bangladesh.
Originality/value
To the researchers' knowledge, perhaps this is the first research of its kind which seeks to explore the current Shariah audit practice in Bangladesh qualitatively, and it provides some practical suggestions for making the necessary developments of the current audit process of IBs. In addition, there are no empirical studies in the entire Emerald insight publishers and Scopus database regarding Shariah audit practices. The study contributes to the agency, stakeholder and legitimacy theories by exploring the Shariah audit of IBs.
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Mezbah Uddin Ahmed, Ruslan Sabirzyanov and Romzie Rosman
The purpose of this paper is to examine the accounting treatment and reporting of a murabaha contract and its implication to the financial statements of Islamic banks. In…
Abstract
Purpose
The purpose of this paper is to examine the accounting treatment and reporting of a murabaha contract and its implication to the financial statements of Islamic banks. In addition, the paper also explains the implication of time value of money on the measurement of a murabaha contract and the concept of substance over form in recognising financial transactions.
Design/methodology/approach
This study reviews the accounting treatment and reporting for a murabaha contract as stated in the Financial Accounting Standards (FAS) of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the application of a murabaha contract as a financial instrument based on International Financial Reporting Standards (IFRS).
Findings
The paper finds that, while IFRS-based financial reporting primarily focuses on economic consequences of financial instruments, AAOIFI further takes into consideration the legal structure of the instruments, which are based on Shari’ah precepts. The paper also finds that IFRS-based financial reporting cannot always capture the distinctive structure of the murabaha and, hence, may lack representational financial reporting. However, the IFRS recognizes the substance of a murabaha contract as financing, and the majority of Islamic banks in Malaysia report it as one of financing and not as a trading contract. For measurement, IFRS adopted the concept of time value of money where the profit allocation is based on amortized cost, which is similar to the measurement of conventional loan transactions that apply the concept of effective interest rate. Meanwhile, AAOIFI uses a straight-line basis to allocate the profit of a murabaha contract.
Practical implications
The forthright discussion and the observations of the paper are expected to assist regulators and standard setters in developing accounting standards that are in convergence but also cater to the unique characteristics of Islamic financial transactions.
Originality/value
The paper criticizes both accounting treatment of a murabaha contract based on the AAOIFI and IFRS and then suggests an extension of these treatments to be adopted to improve the reporting.
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Tauhidul Islam Tanin, Abu Umar Faruq Ahmad and Aishath Muneeza
This study explores the practical application of the Shariah screening process and how it could be enhanced by converging the same with the ethical screening of stocks.
Abstract
Purpose
This study explores the practical application of the Shariah screening process and how it could be enhanced by converging the same with the ethical screening of stocks.
Design/methodology/approach
This study adopts a qualitative research methodology by combining the qualitative descriptive approach and content analysis.
Findings
The findings of this research suggest that there is scope to converge ethical screening of stocks with Shariah Screening as the lex loci applicable to Shariah screening is derived from Shariah, which considers ethics as part of determining its rules.
Practical implications
The data from this study reveal several practical applications, the ultimate goal of which is to help the policymakers and stakeholders understand the relevance of the Shariah screening of stocks and get a streamlined screening process, paving the way to enhance the same using ethical screening criteria to develop its function to become much more relevant irrespective of the denomination of faiths.
Originality/value
This is original research, which is expected to contribute to understanding the extent to which Shariah screening can be enhanced by integrating the ethical stock screening dimension to it.
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The purpose of this paper is to provide an overview of one of the most important and controversial areas of scholarly communication: Open Access publishing and dissemination of…
Abstract
Purpose
The purpose of this paper is to provide an overview of one of the most important and controversial areas of scholarly communication: Open Access publishing and dissemination of research outputs. It identifies and discusses recent trends and future challenges for various stakeholders in delivering Open Access (OA) to the scholarly literature.
Design/methodology/approach
The study is based on a number of interrelated strands of evidence which make up the current discourse on OA, comprising the peer-reviewed literature, grey literature and other forms of communication (including blogs and e-mail discussion lists). It uses a large-scale textual analysis of the peer-reviewed literature since 2010 (carried out using the VOSviewer tool) as a basis for discussion of issues raised in the OA discourse.
Findings
A number of key themes are identified, including the relationship between “Green” OA (deposit in repositories) and “Gold” OA (OA journal publication), the developing evidence base associated with OA, researcher attitudes and behaviours, policy directions, management of repositories, development of journals, institutional responses and issues around impact and scholarly communication futures. It suggests that current challenges now focus on how OA can be made to work in practice, having moved on from the discussion of whether it should happen at all.
Originality/value
The paper provides a structured evidence-based review of major issues in the OA field, and suggests key areas for future research and policy development.