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Article
Publication date: 13 June 2016

Anna Che Azmi and Romzie Rosman

947

Abstract

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Journal of Islamic Accounting and Business Research, vol. 7 no. 3
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 16 August 2021

Anna Che Azmi, Romzie Rosman and Normah Omar

The purpose of this study is to understand the reasons behind the different patterns of Sharīʿah non-compliant income (SNCI) disclosures amongst Islamic banks and, in particular…

258

Abstract

Purpose

The purpose of this study is to understand the reasons behind the different patterns of Sharīʿah non-compliant income (SNCI) disclosures amongst Islamic banks and, in particular, the extent to which Islamic banks make SNCI disclosures. The process involved in gaining and maintaining moral legitimacy forms the framework for this study.

Design/methodology/approach

Interviews were conducted with managers of Islamic banks involved in the reporting of SNCI in company annual reports.

Findings

The interview findings show that Islamic banks prefer to use procedures to gain and enhance moral legitimacy amongst their customers, business partners and staff. The constraints and challenges that Islamic banks face in SNCI reporting make this a popular means of securing moral legitimacy. However, these practices may not lead to enhanced and more communicative SNCI disclosures by Islamic banks.

Originality/value

To the best of the authors’ knowledge, this is the first study that explains the motivations behind SNCI reporting by Islamic banks and frames these motivations under the moral legitimacy framework.

Details

Journal of Islamic Accounting and Business Research, vol. 12 no. 8
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 18 February 2025

Wan Zurina Nik Abdul Majid, Marziana Madah Marzuki, Romzie Rosman and Siti Dalina Tumiran Kamal Nasser

This study aims to explore on how the Islamic social finance mechanism, specifically zakat, influences the corporate social responsibilities (CSRs) of Bank Pembangunan Malaysia…

2

Abstract

Purpose

This study aims to explore on how the Islamic social finance mechanism, specifically zakat, influences the corporate social responsibilities (CSRs) of Bank Pembangunan Malaysia Berhad (BPMB) before and during the COVID-19 pandemic.

Design/methodology/approach

A content analysis was used to examine the disclosure of BPMB for six years (2015–2020). This duration covers the period before and during the COVID-19 pandemic. The content analysis was then analysed manually and also by using NVivo.

Findings

It is apparent that BPMB not only actively engages in CSR activities, especially during difficult times like the COVID-19 pandemic, but also fulfils its religious commitments by making regular zakat payments. The finding also shows that BPMB concentrates more on CSR that covers all population, especially during the COVID-19 pandemic.

Practical implications

This study provides implication to the body of knowledge by highlighting the connection between zakat and CSR and implication to the society and regulators on how zakat plays a role in CSR activities before and during the COVID-19 pandemic.

Originality/value

The novelty of the research and the original study on content analysis of zakat and CSR information in BPMB attest to the originality of this work.

Details

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

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Article
Publication date: 12 August 2020

Mashiyat Tasnia, Syed Musa Syed Jaafar AlHabshi and Romzie Rosman

Corporate social responsibility (CSR) is considered one of the crucial branding and promotional tools for banks to legitimise their role in society to become socially and…

2890

Abstract

Purpose

Corporate social responsibility (CSR) is considered one of the crucial branding and promotional tools for banks to legitimise their role in society to become socially and environmentally responsible corporate citizen. The purpose of this study is to investigate the effect of CSR on stock price volatility of the US banks. This study further examined the moderating role of tax on the relationship between CSR and stock price volatility.

Design/methodology/approach

This study uses the random-effects panel regression estimation technique to test the hypotheses. The authors include a sample of 37 US banks from 2013 to 2017 with 144 bank-years observation. The authors consider the environmental, social and governance (ESG) scores from Refinitiv as a proxy for CSR. The financial data are also collected from the Refinitiv Datastream database.

Findings

This study finds a significant and positive relationship between CSR and stock price volatility, which indicates that shareholders of the US banks may not prefer excess concentration on CSR because of the additional cost of investment associated with implementing CSR. Also, tax payments and stock price volatility show a significant positive association, which implies that there is a higher possibility of an increase in stock price volatility if the tax rate increases. Generally, shareholders are not interested in paying more taxes, so they may swap the market instead of paying more tax. On the other hand, the authors find a non-significant moderating effect of tax payment on CSR-volatility nexus.

Originality/value

Previous studies mainly focussed on CSR and financial performance of banks. Conversely, studies focussing on CSR and stock volatility are limited. This study will fill the gap in the literature by considering the effect of CSR on the stock price volatility of the US banks.

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 1
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 4 March 2022

Wan A'tirah Mahyudin and Romzie Rosman

This study aims to systematically explore the approaches used by previous studies in measuring the performance of Islamic banks based on maqāṣid al-Sharīʿah.

1036

Abstract

Purpose

This study aims to systematically explore the approaches used by previous studies in measuring the performance of Islamic banks based on maqāṣid al-Sharīʿah.

Design/methodology/approach

The data obtained in this study were derived from a review of empirical literature based on 15 articles published between 2012 and 2019. The sample articles on the performance of Islamic banks based on maqāṣid al-Sharīʿah were located by searching keywords in the most relevant social science research databases such as Scopus, Web of Science and EBSCOhost.

Findings

The emerging trend in measuring the performance of Islamic banks from the maqāṣid perspective highlighted that there is insufficient research on the determinants of Islamic bank performance.

Practical implications

The reviews undertaken in this paper will resolve the literature gaps in the area of maqāṣid al-Sharīʿah and Islamic banks, as this study serves as a reference for scholars, academicians and interested researchers in Islamic banking and finance studies to pursue more research in this area.

Social implications

Performance measurement based on maqāṣid al-Sharīʿah enhances society’s confidence in supporting Islamic banking practices, particularly among the Muslim community. Islamic banks can also be exemplary financial intermediaries supporting fair and equitable financial systems for the entire community.

Originality/value

This paper is original in its nature, considering that understanding the relationship between maqāṣid al-Sharīʿah and the performance of Islamic banks is limited. This paper reveals a literature gap that can be explored by future studies theoretically and practically.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 4
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 16 June 2023

Siti Mazlita Yamaludin, Sharifah Faigah Syed Alwi, Romzie Rosman and Mohd Rahim Khamis

This study aims to explore the COVID-19 impact on the sustainability of gharimin (genuine debtors) in Islamic financial institutions (IFI) in Malaysia. The analysis was further…

693

Abstract

Purpose

This study aims to explore the COVID-19 impact on the sustainability of gharimin (genuine debtors) in Islamic financial institutions (IFI) in Malaysia. The analysis was further conducted to expand the interpretation of gharimin in zakat institutions (ZI) to use the role of zakat distribution during the post-pandemic period due to income shock and long-term unemployment.

Design/methodology/approach

This study adopted a qualitative research approach with grounded theory analysis to integrate theoretical insights into the interpretation of gharimin and current practices from the perspectives of ZI and IFI. An in-depth interview with 18 informants was conducted, and data were collected from senior management positions in the zakat distribution department, academicians who are experts in the area of zakat, and heads of Shariah departments in IFI.

Findings

Expanding the interpretation of gharimin could help ZI and IFI recover the sustainability of gharimin for preparedness during post-pandemic and any emergency crisis in the future.

Practical implications

This study implies the potential role of ZI in combating the risk of defaulting debtors in IFI to prepare for pandemic recovery in the future.

Social implications

The new interpretation assists gharimin in reducing the burden debt using the zakat fund and protects genuine debtors by preventing IFI from declaring default or bankruptcy.

Originality/value

This study narrows the literature gaps about gharimin in IFI in the context of the pandemic. To the best of the authors’ knowledge, this is, perhaps, the first paper to present the expansion of interpretation for gharimin into mu’sir in IFI in Malaysia.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 6
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 29 March 2023

Habeebullah Zakariyah, Adnan Opeyemi Salaudeen, Anwar Hasan Abdullah Othman and Romzie Rosman

The popularity of financial technology (fintech) is rising in society due to fintech's direct benefits to users. This digital-based approach is one of the outputs of the…

1150

Abstract

Purpose

The popularity of financial technology (fintech) is rising in society due to fintech's direct benefits to users. This digital-based approach is one of the outputs of the Industrial Revolution 4.0, which transformed the path of human history and resulted in the development of digital transformation strategy innovation, more commonly referred to as digitalisation. Previous literature has predicted that integrating fintech into waqf management will facilitate fintech's growth and expand waqf outreach in Malaysia. Therefore, this paper aims to examine the impact of “Industry 4.0” on the expansion of fintech into cash waqf in Malaysia.

Design/methodology/approach

This study uses Rogers' (2003) diffusion of innovation (DOI) model. In addition, a quantitative approach based on structural equation modelling (SEM) was utilised to analyse the relationship between awareness, knowledge, relative advantage, social norms, perceived trust and fintech adoption in waqf institutions by using the tool Analysis of Moment Structures (AMOS) version 23.0 with maximum likelihood estimation.

Findings

The overall indicate that perceived trust and social norms significantly influence the adoption of fintech by Malaysian waqf. At the same time, other factors such as awareness, relative advantage and knowledge do not appear to significantly influence the adoption of fintech amongst Malaysian waqf institutions.

Research limitations/implications

This study contributes significantly to the current literature concerning the Fourth Industrial Revolution and the wave of technologies. In addition, this study supports relevant theories, including DOI and other technology adoption theories. Aside from this, the study provides empirical contributions to waqf management regarding collecting and distributing waqf, improving the level of regulation of the waqf institutions and enhancing trust between donors, waqf management and beneficiaries. This study is amongst the first in the area of waqf that focus on Malaysian waqf intitutions.

Originality/value

This is important for policy development to support the utilisation of fintech for waqf institutions, which leads to more transparency and efficiency.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2022-0264

Details

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

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Article
Publication date: 13 June 2016

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…

2852

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.

Details

Journal of Islamic Accounting and Business Research, vol. 7 no. 3
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 14 September 2015

Romzie Rosman and Abdul Rahim Abdul Rahman

The purpose of this study is to examine the nature of the risk management practices of Islamic banks as recommended by the Islamic Financial Services Board (IFSB) in managing…

4760

Abstract

Purpose

The purpose of this study is to examine the nature of the risk management practices of Islamic banks as recommended by the Islamic Financial Services Board (IFSB) in managing their unique risks. This study also explores the differences in risk management practices based on the country, size, type and age of the bank.

Design/methodology/approach

A questionnaire was developed to investigate the risk management practices. The main reference for the questionnaire was the IFSB Guiding Principles of Risk Management and the respondents were either the chief risk officers or holders of other senior positions involved in risk management in the Islamic banks. A non-parametric test was then conducted to explain the difference in mean scores for the unique risk management practices by the Islamic banks.

Findings

A lack of effective risk management practices was found in relation to liquidity risk, displaced commercial risk and equity investment risk by Islamic banks. However, Islamic banks were comparatively good in managing operational risk/Shari’ah non-compliance risk. The study found that there was a significant difference in the practice of equity investment risk management based on the size, type and age of the Islamic bank. In addition, a significant difference was found between the Islamic banks in the Middle Eastern and North African (MENA) and Asian countries concerning the practice of both displaced commercial risk and operational risk/Shari’ah non-compliance risk management.

Research limitations/implications

In spite of the limitations in non-parametric analysis, this analysis was preferred inasmuch as the data were measured on an ordinal scale with a small sample size.

Originality/value

This study is among the few studies that examine and explore the risk management practices of Islamic banks internationally by explaining the unique risks encountered in Islamic finance.

Details

Journal of Islamic Accounting and Business Research, vol. 6 no. 2
Type: Research Article
ISSN: 1759-0817

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Book part
Publication date: 26 August 2019

Surianom Miskam, Abdul Monir Yaacob and Romzie Rosman

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and challenges to the…

Abstract

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and challenges to the industry. With the advances in e-finance and mobile technologies, financial technology (Fintech) innovations emerged by combining the e-finance, Internet, social networking services, social media, artificial intelligence (AI) and big data analytics. Fintech promises to reshape the Islamic financial landscape by improving processes’ efficiencies, cost-effectiveness, increased distribution, Sharīʿah compliance and financial inclusion. As far as the Islamic fund management industry is concerned, AI seems to be the keyword. Islamic fund managers have recently started to incorporate AI and big data analytics into their strategy in the process of making accurate decisions based on facts and figures, which eliminates any biases and personal intuition. This disruption in status quo is raising new issues, new concerns and new exciting opportunities. While disruption may carry negative connotations, the industry players have been embracing the innovation and potential revolution the technology could offer. Thus, the objective of this chapter is to discuss legal aspects of Fintech and its impact on the Islamic fund management industry in Malaysia. This chapter introduces a historical overview of Fintech and its evolution in the Islamic fund management industry. This chapter further provides an overview of the legal and regulatory aspects of Fintech with regards to the industry. Finally, legal issues and challenges are identified and discussed. Being a legal research, this chapter adopts a qualitative method by analysing the relevant literatures on the subject. This chapter is expected to provide an insight into the application of Fintech and its impact on the Islamic fund management industry in Malaysia.

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

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