Financial Impact on the Accountability of Malaysian State Islamic Religious Councils (SIRC)

Rosnia Masruki; Khaled Hussainey; Doaa Aly

doi:10.33102/jmifr.v15i2.175

Authors

Rosnia Masruki Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Bandar Baru Nilai, Malaysia
Khaled Hussainey Faculty of Business and Law, Portsmouth Business School, Richmond Building Portland Street, Portsmouth, United Kingdom
Doaa Aly School of Business, University of Gloucestershire, The Park, Cheltenham, GL50 2RH, United Kingdom

DOI:

https://doi.org/10.33102/jmifr.v15i2.175

Keywords:

Financial, Impact, Accountability, Disclosure, State Islamic Religious Councils

Abstract

This paper aims to identify whether Malaysian State Islamic Religious Councils (SIRC) financial characteristics have a significant impact on the accountability of Malaysian State Islamic Religious Councils (SIRC). A content analysis approach was used to examine the extent and quality of disclosure in the annual reports of SIRC, indicating accountability of SIRCs. This paper used the self-developed disclosure index that applies specifically for SIRC. Multiple regression was used to examine the financial determinants of the extent and quality of disclosure. The result of the regression models revealed that the extent and quality of SIRC disclosure is influenced by organisational characteristic, namely size. This study suggests that disclosure in the annual report, in particular the non-financial performance, increases with the amount of zakat collection, thereby demonstrating SIRC’s responsibility. Next, the control variable of accessibility is found to be significantly related to financial statements. Obliged to produce financial statements, SIRC are more likely to disclose more information in the financial statements. This research finding has important implications for regulators, policy makers and top officials in SIRC, by monitoring the quality of disclosure, supporting the notion of public accountability, which appreciates the public’s right to get inform about SIRC. Despite the voluntary disclosure of a non-financial report, SIRC should consider producing a comprehensive annual report for the discharge of their accountability and thus, encourage more funding. They should be more transparent to enhance accessibility, concerning the extent and quality of the disclosure.

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Author Biographies

Rosnia Masruki, Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Bandar Baru Nilai, Malaysia

Khaled Hussainey, Faculty of Business and Law, Portsmouth Business School, Richmond Building Portland Street, Portsmouth, United Kingdom

Doaa Aly, School of Business, University of Gloucestershire, The Park, Cheltenham, GL50 2RH, United Kingdom

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