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Article
Publication date: 3 April 2009

Muhammad Akhyar Adnan and Nur Barizah Abu Bakar

The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by…

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Abstract

Purpose

The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by relevant corporations. The aim is to determine their appropriateness and adherence to both the Islamic as well as the accounting theoretical perspectives.

Design/methodology/approach

Accounting standards and guidelines related to zakat, including the Financial Accounting Standard No. 9 and the Technical Release i‐1, are examined. Additionally, analyses are made on the practices of Islamic financial institutions to determine their compliance with both standards and ontological aspects of zakat.

Findings

The study reveals that there is a general misconception of zakat, as indicated in several standards and guidelines, which has consequently resulted in inappropriateness in their proposed corporate zakat recognition and measurement and hence presentations. These inaccuracies, in one way or another, have not been in line with the true spirit of zakat in Islam. More worryingly, some unfavorable consequences may and in fact have already been implicated on the larger Muslim community as a result.

Research limitations/implications

An alternative view on the accounting treatment of corporate zakat is offered in this paper with the aim to provide a fair and proper assessment of zakat on corporate wealth, which is more parallel to the true spirit of zakat.

Originality/value

The paper integrates both the revealed and the contemporary accounting knowledge in scrutinizing the standards and practices as well as in recommending an improved and meaningful alternative.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 2 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 11 May 2015

Muhammad Akhyar Adnan and Shochrul Rohmatul Ajija

– This paper aims to investigate the effectiveness of Baitul Maal wat Tamwil (BMT) in reducing poverty.

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Abstract

Purpose

This paper aims to investigate the effectiveness of Baitul Maal wat Tamwil (BMT) in reducing poverty.

Design/methodology/approach

The case study approach on BMT MMU Sidogiri (located at East Java Province) is taken. Two important and dominating products of BMT MMU Sidogiri (i.e. ba’i bithaman ‘ajil (BBA) and mudarabah) are examined carefully on how much they have helped the customers in reducing their poverty. The paper goes beyond data measurement using descriptive statistics, paired t-test and some poverty measurement indexes such as headcount index; poverty gap; Sen index; and Foster, Greer and Thorbecke Index to investigate the effectiveness of the BMT in reducing poverty.

Findings

This paper reveals that BMT financing is effective in reducing poverty. Most of respondents can increase their income after receiving BMT financing. Products of BMT, especially BBA and mudarabah, to empower the poor in various productive businesses have been able to reduce the extent and severity of poverty. This paper also discloses some interesting and important findings related with how BMT’s work, so that it can contribute more to the knowledge enrichment, as well as the development of BMTs, in general, in realising their mission.

Originality/value

The establishment of the so-called BMT in the form of an Islamic microfinance is intended initially to effectively help the poor. At present, there are around 3,874 BMTs operating around the country. Although the BMTs have been existing since more than ten years, no research has been conducted to examine their effectiveness in alleviating the poverty. This study in aimed at fulfilling this important gap.

Details

Humanomics, vol. 31 no. 2
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 12 April 2013

Murtala Oladimeji Abioye Mustafa, Muslim Har Sani Mohamad and Muhammad Akhyar Adnan

The purpose of this paper is to investigate and explain the factors underlying the inclination of zakat payers to trust a particular zakat institution.

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Abstract

Purpose

The purpose of this paper is to investigate and explain the factors underlying the inclination of zakat payers to trust a particular zakat institution.

Design/methodology/approach

Based on the literature review and experience survey, a context specific questionnaire was developed as the main method of quantitative data collection. The instrument was administered to a sample of Muslim professionals who observe religious seclusion in the last ten days of the Islamic fasting month (itqaf) in 12 purposely selected mosques across four states and the federal capital territory.

Findings

Drawn from the resource dependence and legitimacy theories, the study finds that board capital, disclosure practices, governmental model of zakat institution, and stakeholder management were identified through the use of structural equation modeling as being the antecedents of zakat payers' trust.

Originality/value

This paper is the first to report an empirically based model of zakat payers' trust.

Details

Journal of Islamic Accounting and Business Research, vol. 4 no. 1
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 28 January 2020

Nori Yani Abu Talib, Radziah Abdul Latiff and Aini Aman

This paper aims to improve the understanding of the institutional pressures that shape the intention to adopt waqf accounting and reporting. The study seeks to answer two research…

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Abstract

Purpose

This paper aims to improve the understanding of the institutional pressures that shape the intention to adopt waqf accounting and reporting. The study seeks to answer two research questions as follows: what are the challenges in the adoption of waqf accounting and reporting in waqf institutions; and how do institutional pressures influence the adoption of waqf reporting in Malaysia. Drawing on the work of DiMaggio and Powell and Scott of institutional theory, this paper provides empirical evidence of institutional pressures on the adoption of waqf reporting in Malaysia and the challenges faced in adopting waqf accounting and reporting.

Design/methodology/approach

This study uses qualitative research method with an explanatory case study approach. Data are collected through semi-structured interviews with the accountants of State Islamic Religious Council and Customs of Terengganu, an informal conversation with the Deputy Director of Accountant Generals Department of Malaysia and document reviews, mainly the Malaysian Accounting Standard Board Research paper.

Findings

The findings show that coercive pressure such as government regulation contributes to challenges in the adoption of waqf accounting and reporting. Normative pressures contribute to challenges in formulating standardised waqf accounting and reporting, whereas mimetic pressure contributes to challenges in the comparability of the waqf accounting and reporting among the state Islamic religious councils in Malaysia. In the efforts towards the standardisation of waqf accounting and reporting practice, a similarity of the process of the standard implementation or the institutional isomorphism of the State Islamic Religious Council in Terengganu is strongly influenced from the result of the mandate of its Board members and Fatwa council members (coercive isomorphism and religion logic) and minor influence from the normative isomorphism (the result of the participants’ education and profession) as well as the result of imitating other State of Islamic Religious Councils (SIRCs) because of the ambiguity of the process or certain practice.

Research limitations/implications

The study contributes to the knowledge by extending institutional theory and the possible role of religion logic in Islamic perspective to organisational behaviour and accounting development in SIRCs. This study is limited to the understanding of the challenges in the adoption of waqf accounting and reporting but could also be applicable to the adoption of other accounting standards or regulations.

Practical implications

This paper offers key implications for research, in improving the understanding of contextual factors and decision to adopt waqf accounting and reporting. The standard setter needs to be aware of the influence of contextual factors that shape decision towards standardisation of accounting and reporting for waqf.

Originality/value

The interplay of institutional pressures and implications of religion logic provides an interesting approach to understanding the waqf institutions’ intention to adopt accounting and reporting for waqf.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 2
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 31 January 2022

Nazamul Hoque

This study aims to look into the scope of exploring and promoting business zakah for the enhancement of the well-being of the underprivileged in society.

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Abstract

Purpose

This study aims to look into the scope of exploring and promoting business zakah for the enhancement of the well-being of the underprivileged in society.

Design/methodology/approach

This is mainly a qualitative research conducted using both primary and secondary data. Primary data have been collected from 34 business entrepreneurs in Bangladesh through semi-structured in-depth interviews. The secondary data have been collected from annual reports with a view to calculating business zakah of five business enterprises for providing an indicative picture of prospective volume of business zakah in Bangladesh. Finally, collected qualitative data have been analyzed thematically following the due procedures with a view to addressing the research questions.

Findings

The findings reveal that around thirty five percent of sample entrepreneurs have used business zakah fund for fully and partially financing their social projects. It also reveals that on average annual business zakah fund amounts to nearly 144m BDT (around US$1.7m) per business enterprise. These findings bear clear witness that business zakah has extensive scope and promising prospect to be an instrument of financing social projects aimed at ensuring social well-being of the disadvantaged.

Practical implications

The findings of this research can be used as a guide to promote business zakah to finance social programs aimed at ensuring the well-being of the underprivileged of all societies particularly of Muslim countries representing one-fourth of the world population.

Originality/value

Exploring and promoting business zakah as an initiative of broadening the base of zakah is an innovative move and net addition to the literature of Islamic finance. It contributes greatly to the poverty alleviation movement in the sense that Muslim business entrepreneurs will now find their business zakah fund readily available to finance their social projects aimed at ensuring well-being of the impoverished.

Details

Journal of Islamic Marketing, vol. 14 no. 4
Type: Research Article
ISSN: 1759-0833

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Article
Publication date: 14 March 2023

Nazamul Hoque, Mahi Uddin, Mohammad Tazul Islam, Abdullahil Mamun, Mohammad Nazim Uddin, Afzal Ahmad and Md Thowhidul Islam

This study looked into the scope of integrating the aspirations of zakah and corporate social responsibility (CSR) to counter poverty, inequity, illiteracy, malnutrition and…

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Abstract

Purpose

This study looked into the scope of integrating the aspirations of zakah and corporate social responsibility (CSR) to counter poverty, inequity, illiteracy, malnutrition and environmental pollution to ensure peace, happiness, prosperity and sustainability as envisaged in sustainable development goals (SDGs).

Design/methodology/approach

This is a qualitative research study conducted using both primary and secondary data. Primary data were collected from 29 business enterprises in Bangladesh employing a semi-structured interview protocol. The secondary data were collected through content analysis of annual reports, websites and CSR publications of sample organizations. Finally, collected qualitative data have been analyzed thematically following the due procedures to address the research questions.

Findings

The findings reveal that integration of the aspirations of zakah and CSR is a convenient and wholehearted approach for entrepreneurs resulting in pursuing SDGs. In addition, business entrepreneurs in Bangladesh consider such practices as killing two birds with one stone because this approach warrants performing both religious and social obligations simultaneously. Interestingly, the study explores that shariah compliance acts as a guiding force for selecting well-being-oriented projects in zakah-funded CSR resulting in pursuing the priority goals – No Poverty (1), Zero Hunger (2) – of SDGs, thereby addressing some of the most critical issues of emerging economies such as Bangladesh.

Practical implications

The findings of this research can be used as a guide to incorporate the spirit and principle of zakah into the CSR programs aimed at pursuing SDGs mainly in Muslim countries representing one-fourth of the world population.

Originality/value

Integration of the aspirations of zakah and CSR is an innovative move and net addition to the literature on sustainability, CSR and zakah because Muslim business entrepreneurs will now conveniently be able to use the entrepreneurs' zakah money – readily available in each financial year – to fund the entrepreneurs' various CSR projects (within shariah framework) relating to poverty alleviation, humanitarian and disaster relief, health and sanitation and environmental conservation which will eventually contribute to pursuing various SDGs.

Details

International Journal of Social Economics, vol. 50 no. 9
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 5 March 2018

UmmeSalma Mujtaba Husein

This paper aims to explore the notion of communication in accounting and in doing so elucidates the wider connotation of accounting frontiers offered in the Islamic philosophy…

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Abstract

Purpose

This paper aims to explore the notion of communication in accounting and in doing so elucidates the wider connotation of accounting frontiers offered in the Islamic philosophy, reflecting upon the Islamic doctrines that are indicative towards and offer a variety of implications for communication and accounting.

Design/methodology/approach

Drawing from the Islamic sources – Quran and other key texts – and other relevant preceding literature, the paper deliberates key Islam principles of significance and outline what they suggest for communication in accounting.

Findings

Islam has a profoundly embedded concern of the communicative aspect from a holistic viewpoint that is clear within its accounting implications as well. This paper illustrates the social aspects of Islamic accounting through its stance on communication, thereby opening up the more enabling potentials of Islamic accounting informed by wider and more facilitating dimensions of Islam’s teachings: Islam’s holistic approach to life; its attentiveness on society and its various groups; and its emphasis on behavioural conduct and emotional aspects. Consideration on these principles throws into questions the Western ways, develops and hones the existing stand of hegemonic positions and submits new ways forward.

Research limitations/implications

Aspiring organisations and larger entities such as nations who encourage the development of Islamic economy can benefit from the added accountability of entities to encompass the social and ethical responsibilities.

Practical/implications

The paper highlights Islamic doctrines as a basis of just and responsible accounting communication via incorporating the macro-societal elements and the behavioural communicative aspects.

Originality/value

The Islamic communication principles open up the inclusion of the missing behavioural aspect from accounting communication. This paper provides the necessary theoretical framework on how to include the humane side within accounting communication.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 2
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 16 January 2017

Hanudin Amin, Abdul Rahim Abdul Rahman, Dzuljastri Abdul Razak and Hamid Rizal

The purpose of this study is to investigate the effects of service quality, product choice and Islamic debt policy on consumer attitude within the context of Islamic mortgage…

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Abstract

Purpose

The purpose of this study is to investigate the effects of service quality, product choice and Islamic debt policy on consumer attitude within the context of Islamic mortgage sector in Malaysia. The present study also examines the effect of attitudinal-behaviour on consumer preference towards preference of Islamic mortgage selection.

Design/methodology/approach

The study is based on questionnaire survey. Data are collected using sample from customers of Islamic banks in Malaysia. The study collects 351 respondents. Data are analysed using partial least squares (PLS).

Findings

The results indicate that service quality, product choice and Islamic debt policy significantly influence consumer attitude, in turn, affecting the Islamic home financing preference. Consumer attitude also mediates the effects of service quality, product choice and Islamic debt policy on the Islamic home financing preference.

Research limitations/implications

Several limitations warrant future research. First, this study considers only a specific user group in one public university. Second, this study does not consider attitude as a moderator. Third, this study suffers from the limited number of factors used. These limitations, however, provide directions for future research.

Practical implications

Our results will add value to the consumer preference topic for Islamic home financing literature. The present study provides bank managers with valuable insights into better planning of Islamic home financing services in Malaysia.

Originality/value

This study is a pioneering effort at exploring consumer attitude and preference from the context of Islamic mortgage sector in Malaysia. The use of PLS analysis provides another important contribution to the literature in this area.

Details

Management Research Review, vol. 40 no. 1
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 26 October 2018

Hairul Suhaimi Nahar

This paper aims to fill the noticeably fragmented zakat literature repertoire by empirically exploring stakeholders’ views toward zakat management performance issues based on a…

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Abstract

Purpose

This paper aims to fill the noticeably fragmented zakat literature repertoire by empirically exploring stakeholders’ views toward zakat management performance issues based on a selected zakat institution (ZI) operating on a corporatized platform with corporate administrative style.

Design/methodology/approach

A quantitative approach using a questionnaire survey distributed to Muslims in the State which ZI is operating was adopted. A total of 448 usable responses are used in the analysis covering descriptive and mean difference.

Findings

The results indicate that managerial reform configuration in terms of corporatization has been viewed positively by stakeholders, translated into a comforting agreement score toward ZI’s improved management performance (collection, disbursement and reporting). Such perceptions are, however, observably sensitive to demographic factors of gender and employment type. The survey also document evidence that the corporatization exercise itself had improved respondents’ confidence toward ZI being the zakat administrator in the State.

Originality/value

The research contributes to the public policy debate with respect to corporatized ZI’s management performance from the stakeholders’ perspective. The results are arguably informative at various levels, forming a basis for reality check and policy inputs for various stakeholders, including (but not limited to) the ZI itself, zakat payers and asnafs, particularly in designing relevant and necessary administrative strategies and relevant policy formulation in addressing the performance and accountability issues in ZIs.

Details

International Journal of Ethics and Systems, vol. 34 no. 4
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 2 January 2018

Muhammad Kashif, Khurrum Faisal Jamal and Mohsin Abdur Rehman

The charitable organizations must understand the forces influencing donor behaviours. This issue has been debated rigorously among researchers belonging to Western societies;…

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Abstract

Purpose

The charitable organizations must understand the forces influencing donor behaviours. This issue has been debated rigorously among researchers belonging to Western societies; however, the exploration of donation experience among non-Western academics is limited. This study aims to discover the phenomenon of Zakat donation experience – an Islamic religious act of charity donation performed among Muslims to enhance our understanding of religious consumption practices in a Muslim country setting of Pakistan.

Design/methodology/approach

The authors used phenomenological methodology to collect data from 35 donors via face-to-face interviews.

Findings

The informants advocate individuality while making Zakat donations and believe that an independent donation experience brings them with higher levels of happiness, intrinsic drive to spend more and spiritual comfort. The Zakat donation is regarded as a great source of self-protection against the realm of evil spirits which is entirely a new finding with respect to charity donations. The informants identified several reasons for not donating through charities which mainly include lack of trust and limited product mix offered by charitable organizations.

Practical implications

Based on the findings of this research, the authors suggest charitable organizations to ensure procedural transparency and emphasize on Zakat collection, distribution and utilization methods to attract more donors.

Originality/value

The study contributes generally to charity marketing knowledge and specifically to consumer decision-making of religious acts performed in Muslim societies. The phenomenological method of inquiry and its application to study an Islamic act of donation has limited discussion in previous studies, which is a unique product of this study.

Details

Journal of Islamic Accounting and Business Research, vol. 9 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

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