TY - CHAP
T1 - Sharia disclosure, sharia supervisory board and the moderating effect of regulatory framework
T2 - The impact on soundness of islamic banking
AU - Khomsatun, Siti
AU - Rossieta, Hilda
AU - Fitriany,
AU - Nasution, Mustafa Edwin
N1 - Publisher Copyright:
© 2021 by Emerald Publishing Limited.
PY - 2021
Y1 - 2021
N2 - The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may increase bank soundness. This study aims to investigate the relationship of sharia disclosure and Sharia Supervisory Board in influencing Islamic bank soundness in the different regulatory framework of the country. Using purposive sampling, the research covered 84 Islamic banks in 16 countries during the period 2013–2015 with lag data of Islamic bank soundness. The result shows sharia disclosure influences on Islamic bank soundness for management efficiency, capital adequacy ratio, asset quality, and liquidity. The results also show that sharia disclosure mediates the indirect effect of SSB on Islamic bank soundness. The regulatory framework (sharia accounting standard and SSB regulation) shows moderating effect of regulation framework proved on the association of sharia disclosure with management efficiency, capital, and liquidity. The effect is indirectly depending on the regulatory framework for proxy management efficiency, capital, and liquidity. The implication of the research suggests that sharia disclosure could increase the market discipline mechanism of Islamic bank stream. The Islamic bank can increase the transparency using sharia disclosure as a branding for increasing public trust, even though in the deficient Islamic bank regulation countries.
AB - The unique characteristic of Islamic bank leads in governance and disclosure. Using stakeholder, signaling, and market discipline theory, governance and adequate disclosure may increase bank soundness. This study aims to investigate the relationship of sharia disclosure and Sharia Supervisory Board in influencing Islamic bank soundness in the different regulatory framework of the country. Using purposive sampling, the research covered 84 Islamic banks in 16 countries during the period 2013–2015 with lag data of Islamic bank soundness. The result shows sharia disclosure influences on Islamic bank soundness for management efficiency, capital adequacy ratio, asset quality, and liquidity. The results also show that sharia disclosure mediates the indirect effect of SSB on Islamic bank soundness. The regulatory framework (sharia accounting standard and SSB regulation) shows moderating effect of regulation framework proved on the association of sharia disclosure with management efficiency, capital, and liquidity. The effect is indirectly depending on the regulatory framework for proxy management efficiency, capital, and liquidity. The implication of the research suggests that sharia disclosure could increase the market discipline mechanism of Islamic bank stream. The Islamic bank can increase the transparency using sharia disclosure as a branding for increasing public trust, even though in the deficient Islamic bank regulation countries.
KW - Islamic bank soundness
KW - Sharia Accounting Standard
KW - Sharia disclosure
KW - Sharia regulatory framework
KW - Sharia supervisory board
KW - SSB regulation
UR - http://www.scopus.com/inward/record.url?scp=85107866354&partnerID=8YFLogxK
U2 - 10.1108/S1571-038620210000028017
DO - 10.1108/S1571-038620210000028017
M3 - Chapter
AN - SCOPUS:85107866354
T3 - International Symposia in Economic Theory and Econometrics
SP - 291
EP - 321
BT - International Symposia in Economic Theory and Econometrics
PB - Emerald Group Holdings Ltd.
ER -