Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Sharia -compliance of financial reporting practices: a case study on waqf

The Sharia -compliance of financial reporting practices: a case study on waqf Purpose – This study aims to examine whether the financial reporting practices of organisations managing waqf (Islamic endowed trust funds) are Sharia-compliant. Design/methodology/approach – This paper reports on a case study of two Islamic-based organisations that manage waqf. The financial statements of these organisations are analysed using content analysis to assess their compliance with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) Sharia Standard No. 33 (SS 33) on waqf. Findings – The authors found that both Islamic-based organisations use different sets of accounting procedures and practices, but that these accounting practices do not contradict the Sharia requirements prescribed in the SS 33 on waqf. However, the SS 33 on waqf requires that waqf funds to be utilised as stipulated by the waqif (donor) and that the accounting practices of both organisations do not adequately address this disclosure requirement. This study also found that the existing accounting practices adopted by organisations that manage waqf need to incorporate more disclosure on their Sharia-based financing and their investment of waqf funds. Research limitations/implications – This study found that the AAOIFI’s SS33 on waqf is a useful guide for identifying the gap between Sharia principles and conventional financial reporting practices for non-profit organisations, and that there are aspects of Sharia-based disclosure practices that are not adequately implemented in financial reporting practices of institutions managing waqf. Practical implications – This study proposes two essential Sharia-based disclosure practices for Islamic-based organisations that manage Islamic-based funds such as waqf. These two aspects are the disclosure on whether waqf funds are adequately utilised as stipulated by the waqif (donor) and what modifications to their existing financial reporting of their Sharia-based financing and investments are required to comply with the unique nature of waqf. Originality/value – This paper fulfils an identified need to study how Sharia principles can be incorporated into the financial reporting practices of organisations that manage Islamic-based funds such as waqf. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Islamic Accounting and Business Research Emerald Publishing

The Sharia -compliance of financial reporting practices: a case study on waqf

Download PDF
18 pages

Loading next page...
 
/lp/emerald-publishing/the-sharia-compliance-of-financial-reporting-practices-a-case-study-on-iBoYbSblDK

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1759-0817
DOI
10.1108/JIABR-10-2012-0069
Publisher site
See Article on Publisher Site

Abstract

Purpose – This study aims to examine whether the financial reporting practices of organisations managing waqf (Islamic endowed trust funds) are Sharia-compliant. Design/methodology/approach – This paper reports on a case study of two Islamic-based organisations that manage waqf. The financial statements of these organisations are analysed using content analysis to assess their compliance with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) Sharia Standard No. 33 (SS 33) on waqf. Findings – The authors found that both Islamic-based organisations use different sets of accounting procedures and practices, but that these accounting practices do not contradict the Sharia requirements prescribed in the SS 33 on waqf. However, the SS 33 on waqf requires that waqf funds to be utilised as stipulated by the waqif (donor) and that the accounting practices of both organisations do not adequately address this disclosure requirement. This study also found that the existing accounting practices adopted by organisations that manage waqf need to incorporate more disclosure on their Sharia-based financing and their investment of waqf funds. Research limitations/implications – This study found that the AAOIFI’s SS33 on waqf is a useful guide for identifying the gap between Sharia principles and conventional financial reporting practices for non-profit organisations, and that there are aspects of Sharia-based disclosure practices that are not adequately implemented in financial reporting practices of institutions managing waqf. Practical implications – This study proposes two essential Sharia-based disclosure practices for Islamic-based organisations that manage Islamic-based funds such as waqf. These two aspects are the disclosure on whether waqf funds are adequately utilised as stipulated by the waqif (donor) and what modifications to their existing financial reporting of their Sharia-based financing and investments are required to comply with the unique nature of waqf. Originality/value – This paper fulfils an identified need to study how Sharia principles can be incorporated into the financial reporting practices of organisations that manage Islamic-based funds such as waqf.

Journal

Journal of Islamic Accounting and Business Research – Emerald Publishing

Published: Apr 13, 2015

There are no references for this article.