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Voluntary adoption of AAOIFI disclosure standards for takaful operators: the role of governance
Journal of Islamic Accounting and Business Research Pub Date : 2021-06-19 , DOI: 10.1108/jiabr-08-2018-0119
Fahru Azwa Mohd Zain , Wan Amalina Wan Abdullah , Majella Percy

Purpose

This paper aims to determine the role governance plays in the voluntary adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Disclosure Standards by Islamic insurance (takaful) operators in the Southeast Asia (SEA) and the Gulf Cooperation Council (GCC) regions.

Design/methodology/approach

This study uses a sample of 44 takaful operators in the SEA and the GCC regions. While corporate governance (CG) strength is measured by the use of the frequently examined variables of the board of directors and audit committee, Shari’ah governance strength is measured by the characteristics of the Shari’ah Supervisory Board (SSB). Content analysis is used to extract disclosure items from the 2014 annual reports. Agency theory, stakeholder theory and political economy theory are argued to support the hypotheses.

Findings

The results show that CG strength has a positive and significant effect on the voluntary adoption of AAOIFI Disclosure Standards by takaful operators, indicating that CG plays an important role in the disclosure of information in the annual reports of takaful operators. However, the results show a lack of association between SSB strength and voluntary adoption of AAOIFI Disclosure Standards. Our results suggest that the SSBs may not be as involved as the other CG mechanisms (such as a board of directors and audit committees) in reviewing financial reports. On another note, the level of the political right and civil liberties has a negative and significant effect on the voluntary adoption of AAOIFI Disclosure Standards, providing an indication that stakeholders in a community with greater freedom tend to be more active in pressuring takaful operators to provide more information to justify their existence in the community. Similar to SSB strength, the legal system is also found to have no significant association with the voluntary adoption of the AAOIFI disclosure standards.

Practical implications

This study provides stakeholders with a tool to evaluate the effectiveness of the governance role in increasing the transparency of takaful operators by examining the governance factors using a self-constructed disclosure index.

Originality/value

Our study is among the first to provide an in-depth analysis of voluntary adoption of AAOIFI Disclosure Standards for takaful operators in these two regions; therefore, this study has implications for regulators and standard setters. The findings of this study are expected to provide information to regulators and standard setters on the role of governance in improving the transparency of takaful operators.



中文翻译:

回教保险经营者自愿采用 AAOIFI 披露标准:治理的作用

目的

本文旨在确定治理在东南亚 (SEA) 和海湾合作委员会 (GCC) 地区的伊斯兰保险(回教保险)运营商自愿采用伊斯兰金融机构会计和审计组织 (AAOIFI) 披露标准方面所起的作用.

设计/方法/方法

本研究使用了 SEA 和 GCC 地区的 44 名回教保险经营者作为样本。虽然公司治理 (CG) 强度是通过使用董事会和审计委员会经常检查的变量来衡量的,但伊斯兰教法治理强度是通过伊斯兰教法监事会 (SSB)的特征来衡量的。内容分析用于从2014年年度报告中提取披露项目。代理理论、利益相关者理论和政治经济学理论被认为支持这些假设。

发现

结果表明,企业管治力度对回教保险经营者自愿采用AAOIFI披露准则具有积极而显着的影响,说明企业管治在回教保险经营者年报信息披露中发挥着重要作用。然而,结果显示 SSB 强度与自愿采用 AAOIFI 披露标准之间缺乏关联。我们的结果表明,SSB 在审查财务报告时可能不像其他 CG 机制(例如董事会和审计委员会)那样参与。另一方面,政治权利和公民自由的水平对自愿采用 AAOIFI 披露标准有负面和显着的影响,表明拥有更大自由的社区中的利益相关者往往更积极地向回教保险经营者施压,要求他们提供更多信息以证明他们在社区中的存在是合理的。与 SSB 实力相似,法律体系也被发现与自愿采用 AAIOFI 披露标准没有显着关联。

实际影响

本研究为利益相关者提供了一种工具,通过使用自建的披露指数检查治理因素,评估治理作用在提高回教保险经营者透明度方面的有效性。

原创性/价值

我们的研究率先对这两个地区的回教保险经营者自愿采用 AAOIFI 披露标准进行了深入分析;因此,这项研究对监管者和标准制定者有影响。预计本研究的结果将为监管机构和标准制定者提供有关治理在提高伊斯兰保险运营商透明度方面的作用的信息。

更新日期:2021-07-09
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