Search results

This paper aims to investigate whether risk-related information is associated with a higher level of performance disclosure (PerfD) in the annual reports during the Covid-19 pandemic. Additionally, this paper assesses if ownership structure plays a moderating effect on the relationship between RD and PerfD.

A content analysis technique to measure the risk information and PerfD for 72 listed firms in the Abu Dhabi stock exchange and Dubai financial market for the period 2019–2021.

The authors find a significant correlation between risk disclosure and PerfD. Indeed, managers use annual reports to send a signal to the market about their abilities and skills in managing high-risk situations by disclosing more performance-related information accompanying any communicated related risk information. Besides, our results report that before the pandemic, only government ownership had a significant effect on the level of disclosure of performance-related information. However, during the pandemic, foreign ownership also played an important role to improve firm transparency. In addition, during the pandemic, Big 4 audit firms have effective quality control, and auditors would play an important role in improving the quality of disclosure. Besides, leveraged firms report more performance-related information. A high level of PerfD may play a critical role in mitigating debtholders’ concerns about firm’ ability to manage the pandemic situation and generate enough cash flows in the future to pay their debts.

This paper’s findings are highly relevant to financial reporting’ users, mainly shareholders, as they will be aware about management behaviors during the crisis and how firms are engaged in disclosure. Besides, this paper’s findings may be useful for market regulators to reinforce the role of audit quality to maintain good reporting, especially in crisis circumstances. In addition, regulators may benefit from the findings through the optimization of the ownership structure (dispersed ownership), which helps to promote transparency and disclosure.

Bank creditworthiness refers to the evaluation of a bank’s ability to meet its financial obligations. It is an assessment of the bank’s financial health, stability and capacity to manage risks. This paper aims to investigate the credit rating patterns that are crucial for assessing creditworthiness of the Islamic banks, thereby evaluating the stability of their industry.

Three distinct machine learning algorithms are exploited and evaluated for the desired objective. This research initially uses the decision tree machine learning algorithm as a base learner conducting an in-depth comparison with the ensemble decision tree and Random Forest. Subsequently, the Apriori algorithm is deployed to uncover the most significant attributes impacting a bank’s credit rating. To appraise the previously elucidated models, a ten-fold cross-validation method is applied. This method involves segmenting the data sets into ten folds, with nine used for training and one for testing alternatively ten times changeable. This approach aims to mitigate any potential biases that could arise during the learning and training phases. Following this process, the accuracy is assessed and depicted in a confusion matrix as outlined in the methodology section.

The findings of this investigation reveal that the Random Forest machine learning algorithm superperforms others, achieving an impressive 90.5% accuracy in predicting credit ratings. Notably, our research sheds light on the significance of the loan-to-deposit ratio as a primary attribute affecting credit rating predictions. Moreover, this study uncovers additional pivotal banking features that intensely impact the measurements under study. This paper’s findings provide evidence that the loan-to-deposit ratio looks to be the purest bank attribute that affects credit rating prediction. In addition, deposit-to-assets ratio and profit sharing investment account ratio criteria are found to be effective in credit rating prediction and the ownership structure criterion came to be viewed as one of the essential bank attributes in credit rating prediction.

These findings contribute significant evidence to the understanding of attributes that strongly influence credit rating predictions within the banking sector. This study uniquely contributes by uncovering patterns that have not been previously documented in the literature, broadening our understanding in this field.

Food waste (FW) is a significant problem in the hospitality sector worldwide. The Covid-19 pandemic has imposed a health protocol on the hospitality sector to protect the customers and the community. This paper aims to evince a new understanding of the tourist city during the Covid-19 pandemic by exploring the effects of the new health protocol on FW management at the consumption stage in the hospitality sector in Dubai.

In this study, the authors use a scale assessment method and a survey distributed to 202 tables in 35 restaurants offering open buffet catering in Dubai.

The paper’s findings provide evidence that: first, the tourist city has faced substantial changes during the pandemic as the new health protocol imposed by the Covid-19 circumstances has mitigated the waste of food in the open buffet services. Second, the highest waste has been observed for vegetables, followed by grains (especially rice) and bread. The lowest waste has been observed for meat and fruits. Third, FW per table varies considerably by consumer groups. The FW quantity of residents is significantly higher than that of tourists. Family gathering tables with an essential number of children waste more food than the other group types. Fourth, consumers claimed to become more conscious about the quantum of FW as a direct response to the socio-economic circumstances imposed by the lockdown such as food availability, salary reduction, economic uncertainty and employment instability. Fifth, the attitude to keeping food on the plate does not change considerably.

This paper offers many practical implications. Using newly discovered pieces of evidence from practitioners, hoteliers and policymakers, this paper highlights current hospitality practices that can reduce the waste of food in a postpandemic world. Furthermore, our paper suggests a set of actions for restaurants offering open-buffet services to reduce FW at the consumption stage.

This paper adds significance to the extant tourist city literature. The tourist city served as an example of a recent urban development characterized mainly by tourist consumption. This research advances the understanding of FW management and customers’ behavior during the Covid-19 pandemic in an important touristic city “Dubai” and suggests a set of actions.

Shariah board (SB) is a unique corporate governancemechanism in Islamic financial institutions. Over the last decade, an increasing number of studies discusses the relationship between SB and Islamic banks' (IB) performance. These researches report conflicting findings due to the heterogeneity of their samples. Therefore,the purpose of this paper is to meta-analyze the results of the previous empirical studies to assess if the differences in findings were attributable to moderating effects related either to the system of SB or the used SB variables or the variables used to identify performance.

To examine the direct and moderating effects of SB attributes, this study uses a meta-analysis technique on a sample of 46 empirical studies, using Hunter and Schmidt’s approach followed by three exploratory moderator analyses: ROE, ROA and Tobin’ Q. Significant results are discussed.

Overall, the meta-analysis findings show that there is a positive significant association between SB meetings and qualifications and IBs’ performance. In testing the moderating effects of financial performance measurement during the post-subprime crisis period, the meta-analysis findings suggest that there is a positive significant association between SB characteristics (size, qualification, reputation, interlock and expertise) and performance. The meta-analysis findings stress the importance of several SB attributes in improving IBs’ performance, especially, during the economic recovery period.

This paper adds significance to the extant Islamic finance literature as well as assists the appropriate stakeholders in assessing the determinants of IBs’ performance from Shariah governance perspective. It further aims to reconcile the findings of the previous studies around the world. Moreover, the findings help future research to build a comprehensive Shariah governance index for IBs.

The purpose of this paper is to examine the determinants of Islamic banks (IBs) product and services disclosure (PSD).

A computer-based content analysis is run upon the annual reports for a sample of 78 IBs operating in 11 countries from 2004 to 2012 to find the number of product and services statements. The levels and trends of PSD are identified. A regression analysis to identify the factors affecting PSD in IBs is also used.

The findings suggest that there has been a significant improvement of PSD over time. The results show a positive association between PSD and Shariah board size, board size, chief executive officer (CEO) tenure, duality in position, blockholders and investment account holders. However, they show a negative association between PSD and institutional ownership. In addition, it appears that board independence does not affect significantly banks’ PSD. It is also found that the bank performance, bank age, leverage, listing, adoption of international financial reporting standards, adoption of Accounting and Auditing Organization for Islamic Financial Institutions and country transparency index have a positive effect on the PSD.

This study offers an original contribution to corporate disclosure literature by being the first to develop and investigate PSD for a large sample of IBs during a long period of time. It links P&S with bank corporate governance characteristics. The findings have many important policy implications. More specifically, this paper encourages regulators in the studied countries to improve corporate governance mechanisms in their Islamic banking systems through the optimization of ownership structure, CEO’s characteristics and the board’s characteristics, to promote PSD. Moreover, the findings support the theoretical predictions of the generalized agency theory. This study’s empirical evidence enhances the understanding of the corporate social responsibility disclosure environment in general and the PSD environment in particular for IBs. This study is the first one that measures PSD in the annual reports for a large cross-countries sample of IBs during a long period of time. It is also the first one that links PSD with IBs corporate governance mechanisms.

This paper aims to examine the development of Islamic accounting education and discuss the main challenges facing this specific type of accounting education in the United Arab Emirates (UAE).

The paper uses institutional theory to analyze the development of Islamic accounting education in the UAE. The collection of information in this study is based on secondary data available from published sources and websites.

This study identifies three types of institutional pressures. First, coercive pressures that were directed by the government, the UAE's Central Bank and other professional bodies [e.g. Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI)] involved in the Islamic banking industry have contributed to the development of Islamic accounting education in the UAE. Second, mimetic pressures exerted by other countries that have already established Islamic accounting training and programs (e.g. Indonesia, Iran, Kingdom of Saudi Arabia and Pakistan) have incentivized the UAE business schools to implement Islamic accounting training and programs to meet Emirati Islamic banking industry expectations. Third, normative pressures are exerted by Big 4 auditors who have an active position as faculty members, influencing status in AAOIFI and a dominant position in the Islamic banking industry’s audit market. The paper also discusses the main challenges facing Islamic accounting education in this country.

This paper contributes to accounting literature in general and accounting education literature in particular in the following two ways. First, this study applies an institutional analysis to Islamic accounting education in the UAE to gain more understanding about the current status of the development of Islamic accounting education in the UAE. Second, by identifying the factors that may constrain the development of Islamic accounting education in the UAE, this study provides recommendations to financial and higher education authorities to undertake proactive actions to position the UAE as a leading center in Islamic accounting education and training.

This paper aims to assess the effects of deposits structure and ownership structure on the GCC Islamic banks’ corporate governance disclosure (CGD) practices.

The study is based on a sample of 38 Islamic banks operating in five Gulf Cooperation Council (GCC) countries, and the authors observed them over the period from 2006 to 2011. The authors used the transparency and disclosure score, developed by Standard & Poor’s (S&P), to identify the sample’s CGD scores.

This paper’s findings suggest that the level of CGD is lower for Islamic banks with higher ownership concentration, for levered Islamic banks and for Islamic banks with greater concentration of nonprofit-sharing investment accounts (PSIA) and is higher for Islamic banks with greater concentrations of PSIA; the Islamic bank size; the bank age; listed bank and the country transparency index. By disaggregating the total CGD into the three sub-categories, the authors are able to specify, also, the components of corporate governance (CG) impacted by various determinants.

This paper is subject to a number of limitations. First, there is manual scoring of annual reports (subjectivity). Second, the research focuses exclusively on the GCC context and excludes the other Middle East, Southeast Asia and Far East countries, where ownership structure and deposits structure might affect CGD differently. Third, the governance score, which is used in this research, is developed by S&P and does not take into account the characteristics of Islamic banks.

The findings of this paper suggest many policy implications. First, through the optimization of ownership structure, GCC countries’ regulators have to improve the Islamic banking system’s CG mechanisms through the optimization of ownership structure (dispersed ownership) to promote transparency and disclosure. Second, regulators and policymakers should revise guidelines with the main purpose of protecting PSIA’ holders (considered to be minor shareholders without voting power) through promoting disclosure and transparency. Third, the findings can be useful for many international supervisory bodies, like the Islamic Financial Services Board (IFSB) and Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), in evaluating transparency and disclosure standards.

This study is expected to be useful for all market participants, namely, investors, financial analysts, managers, marker regulators and many international Islamic supervisory bodies, such as the IFSB and AAOIFI, by providing new requirements on CGD in the GCC region and in better understanding its determinants for Islamic banks in this region.

Blockchain looks to be the next step of technology transformation and would redesign the business landscape. It is expected to have an impact on business methods in the next few years; which add new challenges and complexity to the accounting and assurance profession. This paper aims to analyze the perceptions of accountants and auditors toward the implementation of blockchain technology in the UAE after the government decided to transform 50% of government transactions into the blockchain platform by 2021.

A qualitative approach has been used in this study. A semi-structural interview has been conducted with 19 accountants, internal auditors, auditors and risk managers on the potential opportunities and challenges of blockchain technology on accounting and auditing practices in the UAE.

The findings show that the blockchain impacts on the accounting profession in terms of recording of transactions, storing evidence and providing a secured environment for conducting business transactions. For the auditors, the results indicate that the blockchain changes their audit process and strategy. The blockchain has great potential to supplement traditional auditing by providing a low-cost and decentralized audit process and automated audit evidence. The accounting of the companies will not be changed but it will be automated with the development of cryptocurrencies and blockchain activities. The blockchain will be developed in assurance services through the awareness and involvement of accounts and auditors.

The study contributes to the existing literature as follows. First, the research is one of the very few studies that discussed empirically the effect of blockchain on the accounting and assurance profession, which contributes to improved knowledge about the potential of blockchain technology to accounting and assurance services. Second, our research is the first to explore the accountants and financial auditors’ perceptions regarding the potential effect of blockchain technology on their profession in the UAE context after the government decided to transform 50% of government transactions into the blockchain platform by 2021. Third, the research identifies the pending challenges for blockchain and possible factors for its effectiveness.

The aim of this paper is to examine the impact of corporate governance mechanisms on earnings management practice for a sample of Gulf Cooperation Council (GCC) Islamic banks (IBs) using a new model of earnings management.

First, the authors estimate discretionary accruals based on loan loss provisions discretionary loan loss provision (DLLP) using the procedure derived from Jones’ (1991) original model. Second, the authors run a multivariate regression model to check the linkage between corporate governance characteristics and discretionary loan loss provision. Finally, the authors use an additional sensitivity check analysis to assess whether the results are robust to the estimation procedure and to other exogenous factors.

Using as sample of 26 IBs pertaining to the GCC region with a total of 223 firm-year observations and a nine-year period (2004-2012), the results are conclusive and show that first, IBs with large Shariah Board size manage less DLLP. Secondly, Accounting and Auditing Organization for Islamic Financial Institutions membership positively impacts earnings management through DLLP in IBs. Third, there is a negative relationship between boards of director’s independence the extent to which IBs manage DLLP. Fourth, the existence of block holders positively affects earnings management by IBs. Fifth, there is a negative relationship between audit committee meetings and DLLP. Finally, institutional ownership and bank size have no effect on earnings management through DLLPs.

In this research, the authors do not take into account all governance factors that are supposed to impact earnings management in IBs. Future research should explore the impact of additional IBs governance structures including chief executive officer bonus, experience, gender and the extent to which IBs use real earnings management with Murabaha, Mudaraba and Musharaka transactions.

The paper is a very useful source of information that may provide relevant guidelines in helping the future development of corporate governance of IBs. In addition, the findings could prove to be useful for regulators because they are responsible for the acceptable level of corporate governance standards. Thus, they must consider strengthening governance mechanisms either through new legislation or stronger enforcement where earnings management is of such magnitude to that serious impedes information transparency and financial reporting quality of IBs.

This study associates the corporate governance characteristics with earnings management by IBs. The study contributes to the growing body of literature on earnings management and corporate governance in IBs. It should be useful to researchers, regulators, investors, analysts and creditors as well as other players in the capital markets, as it presents a new and important aspect that needs to be accounted for when assessing the quality of IBs’ accounting information in GCC countries.

Previous works assessing the determinants of banks’ risk disclosure in emerging economies focused on one aspect of risk reporting such as market risk disclosure or operational risk disclosure. While banks’ transparency about other major risk types (e.g. capital adequacy, liquidity risk…) is important for both market discipline and for their financial stability, no previous research has tried to discuss their determinants for Islamic banks. This paper aims to fill the gap by assessing the effects of deposits structure and ownership concentration on risk disclosure for Islamic banks.

The authors based on a sample of 71 Islamic banks operating in 12 emerging economies and observed over the period 2009–2014. The authors used a risk disclosure index covering nine dimensions, and the authors used both generalized least squares (GLS) regression and generalized method of moments (GMMs) as econometric tools.

The findings suggests that the level of risk disclosure is lower for Islamic banks with higher ownership concentration, leveraged bank, listed banks and Islamic banks. However, risk disclosure is higher for Islamic banks with higher concentration of profit sharing investment account (PSIA) and higher foreign ownership, large Islamic banks, aged banks, Islamic banks operating in country with higher country transparency index, positively correlated to gross domestic products and Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) adoption. By disaggregating total risk disclosure into the nine sub-categories, the authors are able to specify, also, the components of risk disclosure impacted by various determinants.

This paper’s findings are subject, also, to a number of limitations. First, there was manual scoring of annual reports (subjectivity). Second, while some items might have higher information content or be more useful than others for users of Islamic banks’ annual reports, no weighting is assigned to items. Third, the research focuses exclusively on the 12 countries and excludes the other Middle East, Southeast Asia and Far East countries where ownership structure and deposits structure might affect risk disclosure differently.

The findings suggest many policy implications. First, regulators have to improve corporate governance mechanisms in Islamic banking system through the optimization of ownership structure (dispersed ownership) to promote transparency and disclosure. Second, regulators and policymakers should revise guidelines in the main purpose to protect PSIAs holders (considered as minor shareholders without voting power) through promoting disclosure and transparency. Third, the findings can be useful for many international supervisory bodies such as the IFSB and AAOIFI to evaluate transparency and disclosure standards.