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Sharīʿah non-compliant income disclosures and the moral legitimacy strategies of Islamic banks

Che Azmi, Anna and Rosman, Romzie and Omar, Normah (2021) Sharīʿah non-compliant income disclosures and the moral legitimacy strategies of Islamic banks. Journal of Islamic Accounting and Business Research. ISSN 1759-0817 E-ISSN 1759-0825

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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

Item Type: Article (Journal)
Uncontrolled Keywords: Islamic banks, Moral legitimacy, SNCI reporting
Subjects: H Social Sciences > HG Finance
H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr. ROMZIE ROSMAN
Date Deposited: 26 Aug 2021 08:27
Last Modified: 30 Aug 2021 08:41
URI: http://irep.iium.edu.my/id/eprint/91743

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