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Year 2018, Volume: 5 Issue: 1, 109 - 132, 15.02.2018

Abstract

References

  • • AAOIFI. (2007). Shari'a standards of AAOIFI, available at : http://iefpedia.com • Aboud, S., (2009). The global financial crisis between the principle of disclosure and transparency (in arabic), presented in Third Scientific Conference, April 2009, Amman, Jordan. • Ahmed, M, U, Sabirzyanov, U & R Rosman, (2016), A critique on accounting for murabaha contract: A comparative analysis of IFRS and AAOIFI accounting standards, Journal of Islamic Accounting and Business Research, 7 (3), pp.190-201 • Akhigbe, A, McNulty, J. E, & B. A. Stevenson, Additional evidence on transparency and bank financial performance, Review of Financial Economics, 32 (1), pp.1-6 • Beck, T., Demirgüc¸ -Kunt, A., & Merrouche, O. (2013). Islamic vs conventional banking: Business model, efficiency and stability. Journal of Banking & Finance, 37 (2), pp.433-447. • Beni Salema, M., & Kand Draghma, S, S., (2014). Transparency standards in Islamic jurisprudence and its impact on crisis prevention, Journal of the Islamic University of Islamic Studies, 22 (2), pp.475-507. • Benjamin. F. (2014), “The Demand and Need for Transparency and Disclosure in Corporate Governance”, Universal Journal of Management, 2(2), pp.72-80. • Boukhris, K. & Nabi, S.M,. (2013). Islamic and conventional banks' soundness during the 2007–2008 financial crisis. Review of Financial Economics, 22(2), pp.68–77 • Bushman, R. M., (2016). Transparency, Accounting Discretion, and Bank Stability, Economic Policy Review, 22 (1), pp.129-149. • Christina, D. (2003), Transparency- Considerations for PPGIS Research and Development, URISA Journal, 15 (1), pp.73-78. • De Mendonça, H., Galvão, D., & Loures, R. .(2010)What is the importance of regulation and transparency in the subprime crisis?”. Banks and Bank Systems, 5 (1), pp.32-46. • Dridi, J. & Hasan, M., (2010). Have Islamic banks been impacted differently than conventional banks during the recent global crisis? IMF Working Paper. International Monetary Fund, Washington. • El Hamma. A. (2015). La comptabilité des produits financiers islamiques : Normes AAOIFI vs. IFRS, Revue de Management et de Stratégie, 1(2), pp.10-22. • Essaben, M. S. (1996). Studies in financial assets, measurement assets and methods of accounting, University House, Beirut, Lebanon • Gibson, C. H. (2013), Financial reporting and analysis, using financial accounting information, 13 edition, Cengage Learning, South Western, USA. • Hameed, S. (2009). Accounting and auditing for Islamic Financial Institutions, Kuala Lumpur: INCEIF, 1st Edition. • IFSB. (2016). “Islamic Financial services industry stability report, available at : http://www.ifsb.org/docs/IFSI%20Stability%20Report%202016%20(final).pdf • Kammer, A., Norat,M., Piñón, M., Prasad, A., Towe, C., Zeidane, Z & IMF Staff Team. (2015). Islamic Finance: Opportunities, Challenges, and Policy Options, IMF staff Discussion note, available at: https://www.imf.org/external/pubs/ft/sdn/2015/sdn1505.pdf. • Kane, E.J, (2009), Ethical failures in regulating and supervising the pursuit of safety-net subsidies, European Business Organization Law Review, 10, pp.185-21 • Kantakji, S, M. (2012), The Financial and accountancy Disclosure Language, Abi Al-Fida International Publishing House, distribution and translation, Hama, Syria. • Keys, B., Mukherjee, T., Seru, A. & Vig. (2009). Financial Regulation and Securitization: Evidence from Subprime Loans. Journal of Monetary Economics., 56(5), pp.700-720 • Khalil W. A. & Ashmaoui, A, M.,( 2008). Corporate governance, Freedom Library for Publishing, Egypt. • Kimura, S & H Ogawa, (2007). “A model for the convergence of accounting standards”, in Research in accounting regulation, Gary J Previts (ed), Vol 19, pp. 215-229. • Khedhery M. A. (2005). Corporate governance, Arab Nile Group, Cairo, Egypt. • Khouja E, (2013). Encyclopedia of Islamic Financial transactions : General entrance financial transactions, Al-Imtithal Islamic Finance, Tunisia. • Levy A., Rezgui H., (2013). Application des normes comptables internationales dans les banques islamiques : quel impact sur l’image fidèle de leurs états financiers ?, presented in Congrès de l'AFC, "Comptabilité sans frontières : The French Connection", 31 may and 1 june, 2013, Montréal, Canada. • Lmahfoud, S. & Tener. G (2015). La Mourabaha : principes, pratiques, controverses, Les Cahiers de la Finance Islamique. N° Spécial 2015. • Pozen, R. (2009), Too Big to Save?, John Wiley and Sons, Inc. • Stiglitz, J. E. (2009). The financial crisis of 2007/2008 and its macroeconomic consequences, Initiative for Policy Dialogue Working Paper Series, New York, available at: https:// doi.org/10.7916/D8QZ2HSG

Do Islamic Banking standards convey more financial transparency than conventional banking ones?

Year 2018, Volume: 5 Issue: 1, 109 - 132, 15.02.2018

Abstract

This study examines
the criteria of transparency and disclosure in Islamic banking and compares
them to conventional banking.

By examining the
traditional accounting standards for transparency, namely IAS 1, IAS 24, IFRS
  along
with
the Accounting and Auditing Organization for Islamic
Financial Institutions (AAOIFI)
standards, we highlighted that despite
the fact that the conventional banking strives to achieve transparency; there
is a lack of optimal transparency in conventional banking products. This
deficiency is caused by the lack of the determination of the rate of change of
interest and the variable interest loans, the securitization and the sale of
debt. This leads to a lack of transparency of all important financial and
non-financial information, lack of disclosure in the balance sheet such as
bankruptcy and the real characteristics of traded financial instruments.

Nevertheless, the
principles of Islamic finance, such as the prohibition of riba and gharar
as well as the link to the real economy emphasize transparency in Islamic
banking transactions. So, the AAOIFI advocated the high transparency. Besides
to the conventional disclosure, there is a disclosure of the basis of the
distribution of revenues, the determination of selling prices and the statement
of the illegitimate part of bank activity.
 Furthermore, by considering a sample of
AAOIFI accounting standards 2 related Murabaha to the
Purchase Order
and comparing it
to conventional loan, we concluded that financial transparency is more enforced
in Islamic banking than in conventional one. Transparency protected Islamic
banking transactions from falling into
the subprimes
crisis.

References

  • • AAOIFI. (2007). Shari'a standards of AAOIFI, available at : http://iefpedia.com • Aboud, S., (2009). The global financial crisis between the principle of disclosure and transparency (in arabic), presented in Third Scientific Conference, April 2009, Amman, Jordan. • Ahmed, M, U, Sabirzyanov, U & R Rosman, (2016), A critique on accounting for murabaha contract: A comparative analysis of IFRS and AAOIFI accounting standards, Journal of Islamic Accounting and Business Research, 7 (3), pp.190-201 • Akhigbe, A, McNulty, J. E, & B. A. Stevenson, Additional evidence on transparency and bank financial performance, Review of Financial Economics, 32 (1), pp.1-6 • Beck, T., Demirgüc¸ -Kunt, A., & Merrouche, O. (2013). Islamic vs conventional banking: Business model, efficiency and stability. Journal of Banking & Finance, 37 (2), pp.433-447. • Beni Salema, M., & Kand Draghma, S, S., (2014). Transparency standards in Islamic jurisprudence and its impact on crisis prevention, Journal of the Islamic University of Islamic Studies, 22 (2), pp.475-507. • Benjamin. F. (2014), “The Demand and Need for Transparency and Disclosure in Corporate Governance”, Universal Journal of Management, 2(2), pp.72-80. • Boukhris, K. & Nabi, S.M,. (2013). Islamic and conventional banks' soundness during the 2007–2008 financial crisis. Review of Financial Economics, 22(2), pp.68–77 • Bushman, R. M., (2016). Transparency, Accounting Discretion, and Bank Stability, Economic Policy Review, 22 (1), pp.129-149. • Christina, D. (2003), Transparency- Considerations for PPGIS Research and Development, URISA Journal, 15 (1), pp.73-78. • De Mendonça, H., Galvão, D., & Loures, R. .(2010)What is the importance of regulation and transparency in the subprime crisis?”. Banks and Bank Systems, 5 (1), pp.32-46. • Dridi, J. & Hasan, M., (2010). Have Islamic banks been impacted differently than conventional banks during the recent global crisis? IMF Working Paper. International Monetary Fund, Washington. • El Hamma. A. (2015). La comptabilité des produits financiers islamiques : Normes AAOIFI vs. IFRS, Revue de Management et de Stratégie, 1(2), pp.10-22. • Essaben, M. S. (1996). Studies in financial assets, measurement assets and methods of accounting, University House, Beirut, Lebanon • Gibson, C. H. (2013), Financial reporting and analysis, using financial accounting information, 13 edition, Cengage Learning, South Western, USA. • Hameed, S. (2009). Accounting and auditing for Islamic Financial Institutions, Kuala Lumpur: INCEIF, 1st Edition. • IFSB. (2016). “Islamic Financial services industry stability report, available at : http://www.ifsb.org/docs/IFSI%20Stability%20Report%202016%20(final).pdf • Kammer, A., Norat,M., Piñón, M., Prasad, A., Towe, C., Zeidane, Z & IMF Staff Team. (2015). Islamic Finance: Opportunities, Challenges, and Policy Options, IMF staff Discussion note, available at: https://www.imf.org/external/pubs/ft/sdn/2015/sdn1505.pdf. • Kane, E.J, (2009), Ethical failures in regulating and supervising the pursuit of safety-net subsidies, European Business Organization Law Review, 10, pp.185-21 • Kantakji, S, M. (2012), The Financial and accountancy Disclosure Language, Abi Al-Fida International Publishing House, distribution and translation, Hama, Syria. • Keys, B., Mukherjee, T., Seru, A. & Vig. (2009). Financial Regulation and Securitization: Evidence from Subprime Loans. Journal of Monetary Economics., 56(5), pp.700-720 • Khalil W. A. & Ashmaoui, A, M.,( 2008). Corporate governance, Freedom Library for Publishing, Egypt. • Kimura, S & H Ogawa, (2007). “A model for the convergence of accounting standards”, in Research in accounting regulation, Gary J Previts (ed), Vol 19, pp. 215-229. • Khedhery M. A. (2005). Corporate governance, Arab Nile Group, Cairo, Egypt. • Khouja E, (2013). Encyclopedia of Islamic Financial transactions : General entrance financial transactions, Al-Imtithal Islamic Finance, Tunisia. • Levy A., Rezgui H., (2013). Application des normes comptables internationales dans les banques islamiques : quel impact sur l’image fidèle de leurs états financiers ?, presented in Congrès de l'AFC, "Comptabilité sans frontières : The French Connection", 31 may and 1 june, 2013, Montréal, Canada. • Lmahfoud, S. & Tener. G (2015). La Mourabaha : principes, pratiques, controverses, Les Cahiers de la Finance Islamique. N° Spécial 2015. • Pozen, R. (2009), Too Big to Save?, John Wiley and Sons, Inc. • Stiglitz, J. E. (2009). The financial crisis of 2007/2008 and its macroeconomic consequences, Initiative for Policy Dialogue Working Paper Series, New York, available at: https:// doi.org/10.7916/D8QZ2HSG
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Journal Section ARTICLES
Authors

Khoutem Ben Jedidia

Publication Date February 15, 2018
Published in Issue Year 2018 Volume: 5 Issue: 1

Cite

APA Ben Jedidia, K. (2018). Do Islamic Banking standards convey more financial transparency than conventional banking ones?. Turkish Journal of Islamic Economics, 5(1), 109-132.
AMA Ben Jedidia K. Do Islamic Banking standards convey more financial transparency than conventional banking ones?. TUJISE. February 2018;5(1):109-132.
Chicago Ben Jedidia, Khoutem. “Do Islamic Banking Standards Convey More Financial Transparency Than Conventional Banking Ones?”. Turkish Journal of Islamic Economics 5, no. 1 (February 2018): 109-32.
EndNote Ben Jedidia K (February 1, 2018) Do Islamic Banking standards convey more financial transparency than conventional banking ones?. Turkish Journal of Islamic Economics 5 1 109–132.
IEEE K. Ben Jedidia, “Do Islamic Banking standards convey more financial transparency than conventional banking ones?”, TUJISE, vol. 5, no. 1, pp. 109–132, 2018.
ISNAD Ben Jedidia, Khoutem. “Do Islamic Banking Standards Convey More Financial Transparency Than Conventional Banking Ones?”. Turkish Journal of Islamic Economics 5/1 (February 2018), 109-132.
JAMA Ben Jedidia K. Do Islamic Banking standards convey more financial transparency than conventional banking ones?. TUJISE. 2018;5:109–132.
MLA Ben Jedidia, Khoutem. “Do Islamic Banking Standards Convey More Financial Transparency Than Conventional Banking Ones?”. Turkish Journal of Islamic Economics, vol. 5, no. 1, 2018, pp. 109-32.
Vancouver Ben Jedidia K. Do Islamic Banking standards convey more financial transparency than conventional banking ones?. TUJISE. 2018;5(1):109-32.