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Microfinance institutions (MFIs), including Islamic microfinance institutions (IMFIs) in Muslim countries, have spread across the globe and transformed into a new industry. However, how IMFIs in Indonesia evolved to become an important sector serving society has not been rigorously explored. Therefore, the purpose of this paper is to address the lacuna on the emergence of an industry by examining the development of Islamic microfinance sector in Indonesia.

The paper adopts the historical research method to narrate the evolution of this specific sector based on the data collected through oral history and published academic research documents during various periods of Indonesia’s economic and political milieu.

This paper demonstrates that the emergence and development of IMFIs in Indonesia has been shaped within the wider process of socio-political changes, particularly, the role of Islamic movement and politics in Indonesia.

Most studies investigating the emergence and transformation of institution or industry adopt the static approach, which has been criticised as it fails to consider the process of emergence, growth path and the survival of organisations. Hence, this paper contributes to the literature by analysing the institutional evolution by locating the institution inside its wider environmental context by using Bourdieu’s concept of field to narrate the historical development of IMFIs from its emergence and evolution to become a significant new industry in the country.

Despite the growing literature on corruption, little is known about what is happening in most Islamic countries. Hence, the purpose of this paper is to argue that focussing on the adopted politico-economical ideology such as neoliberalism contributes in understanding the root of corruption.

Critical realism of the state of corruption in Muslim countries and secondary sources available in the literature review help account for corruption within the local settings.

Corruption takes on various forms and functions in different contexts, and it can occur at the international and national arenas and at various layers of the state. The paper argues that the adopted neoliberal politico-economical strategy in Muslim countries is the main source of corruption.

Corruption ranges from an act of payment that contradicts the law to an endemic malfunction of a political and economic system that may be attributed to individual moral or political or a combination of both. Hence, given the differences among Islamic countries, economic and political milieu case studies help explore the kind of corrupted leaderships in the particular country and how corruption is combated.

Corruption is a complex and multifaceted phenomenon. Accounting for corruption using neo-political lens is relatively new to the literature. Hence, this paper calls on accounting for evidence on how aspired autocratic leaderships in Muslim countries managed to personalise power and weaken the infrastructural apparatus that provide the necessary check and balance, thus facilitating the production of corruption on both the demand and supply sides.

Drawing upon underinvestment theory and clientele effect hypothesis, this paper aims to examine the effects of foreign currency (forex) exposure and Shari’ah-compliant status on firms’ financial hedging strategy.

Based on data of 250 nonfinancial firms listed on Bursa Malaysia from 2010 to 2018 (2,250 firm-year observations), the authors test the impact of forex exposure based on a vector of foreign-denominated cash flows (FCF) indicators and firms’ Sharīʿah-compliant status on two proxies of financial hedging decisions, namely, the ratio of the notional value of currency derivatives to total assets and a binomial measure of hedging status. The hedging decision models are estimated using panel logistic regression and system generalized method of moments.

The results indicate significant positive effects of the forex exposure indicators on firms’ propensity to hedge. However, the impact of forex exposure is most prevalent via total FCF. The results also reveal significant positive effects of Sharīʿah-compliant status on firms’ propensity to hedge but its negative impacts on the value of currency derivatives they use. The results suggest that Sharīʿah-compliant firms refrain from engaging in currency derivatives to avoid riba’ and subsequently subdue the clientele effect. However, when the forex exposure reaches higher levels, engagement in currency derivatives becomes a matter of tentative necessity (dharurat).

This study relies exclusively on the disclosure of foreign currency risk and management data in the annual reports of listed companies. Consequently, this limits the sample size to only those nonfinancial listed companies with complete data for the study period. Also, since none of the companies reports using Sharīʿah-compliant derivatives, the authors thus assume that they use derivative instruments that tolerate “riba.”

Given the significance of forex exposure on hedging decisions, the accounting profession must strictly adopt FRS 7 and FRS 139 for all listed firms to avoid market scrutiny and sustain their clientele. The results also call for the Islamic market regulators to include mandatory disclosure of conventional currency derivatives in screening firms for clearly prohibited activities to help enhance the credibility of its Islamic financial market.

Due to difficulty accessing relevant cash flow data, the study is among the few studies that measure forex exposure using FCF and test more proxy indicators. This study is perhaps the first to examine the Shari’ah perspective on currency derivatives in corporate forex risk management.

The main purpose of this paper is to examine one aspect of auditor‐client relationship, namely audit tenure and switching behaviour, and factors affecting it. Lengthy audit tenure with the same client has been cited as one of the threats to auditor independence. Given the importance of this issue, this research attempts to shed some light on the effect of audit tenure and switching behaviour on auditor independence in Malaysia.

This study evaluates the effects of various independent variables on switching behaviour and audit tenure using logistic regression analysis.

An examination of 297 companies listed on the Kuala Lumpur Stock Exchange over a period of 11 years reveals audit firm switching to be significantly associated with distressed large clients and that the length and direction of switch depend upon the type of audit firm.

A number of important variables such as corporate governance characteristics, audit and non‐audit fees and types of audit opinion that could enhance our understanding of audit tenure and auditor switching in Malaysia, were not incorporated into our regression models. Hence, future studies may consider such variables.

This study is the first conducted using Malaysian data where audit tenure and switching are used as dependent variables. The results have important implications on the auditing profession and regulators in Malaysia.