Emerald | Journal of Islamic Accounting and Business Research | Table of Contents http://www.emeraldinsight.com/1759-0817.htm Table of contents from the most recently published issue of Journal of Islamic Accounting and Business Research Journal en-gb Tue, 02 Sep 2014 00:00:00 +0100 2014 Emerald Group Publishing Limited editorial@emeraldinsight.com support@emeraldinsight.com 60 Emerald | Journal of Islamic Accounting and Business Research | Table of Contents http://www.emeraldinsight.com/common_assets/img/covers_journal/jiabrcover.gif http://www.emeraldinsight.com/1759-0817.htm 120 157 ‘Conventional’ accounting vs. ‘Islamic’ accounting: The debate revisited http://www.emeraldinsight.com/journals.htm?issn=1759-0817&volume=5&issue=2&articleid=17115160&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The purpose of this paper is to evaluate the arguments that the assumptions underlying conventional accounting are incompatible with Islamic values, hence the need for new accounting objectives and assumptions. <B>Design/methodology/approach</B> - The paper adopts an analytic approach based on a combination of archival and bibliographic data sources.<B>Findings</B> - It is shown that this belief of incompatibility, can be traced to misconceptions about the assumptions underlying ‘conventional accounting’. It is then argued that the neglect of Islamic accounting in Islamic countries, could be attributed to Islamic accounting not meeting the needs of users rather than acculturation or economic dependency.<B>Research limitations/implications</B> - The study relies solely on the literature and highlights important issues in the area but does not provide any empirical evidence. The implications are significant for the future development of Islamic accounting and the economies of Islamic countries. The objective of accounting is to provide useful information for economic decision making and the adoption of wrong assumptions would limit the usefulness of accounting information.<B>Originality/value</B> - Few scholars have questioned the assumptions underlying Islamic accounting and this debate is important for the continued development of Islamic accounting. The paper also attempts to contribute to the debate on the poor of adoption of Islamic accounting Article literatinetwork@emeraldinsight.com (Sivakumar Velayutham) Tue, 02 Sep 2014 00:00:00 +0100 An Islamic perspective on the true and fair view override principle http://www.emeraldinsight.com/journals.htm?issn=1759-0817&volume=5&issue=2&articleid=17115103&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The paper aims to determine whether the ‘true and fair view override’ (TFVO) principle is relevant and applicable in Islamic accounting. In addition, the paper examines the roles that TFVO could play in Islamic accounting and auditing. <B>Design/methodology/approach</B> - A qualitative research method was used based on documentary and textual analysis of the Shari’ah fundamentals (Islamic legal sources) and relevant accounting standards and regulations. <B>Findings</B> - The paper found that the TFVO is relevant and applicable in Islamic accounting and auditing and not contradictory to the rules of the Shari’ah. Therefore, the concept is acceptable for use in Islamic accounting. Moreover, based on the several roles played by the TFVO, in the Islamic context, the practicality of this concept in Islamic accounting provides further justification for its continued usage.<B>Practical implications</B> - The findings of the paper provides a basis to support the inclusion of the TFVO in Islamic accounting standards as well as possible usage by IFIs. Thus, regulators of IFIs and Islamic accounting standards setting bodies can consider it in their challenging task of standardizing accounting practices due to the different interpretations of transactions from the various Madhahib and multiple accounting concepts and practices. In addition, the discussion in the paper reminds accountants and auditors of IFIs and Islamic organisations that providing a TFV is paramount, thus an override of inapplicable accounting standards and regulation is allowed; but not Shari’ah. Thus, TFVO can assist accountants to record transactions that reflect the economic reality of the IFIs, especially prior to accounting regulations keeping pace with the rapid business environment.<B>Originality/value</B> - The paper has highlighted a very important issue relating to the ‘true and fair view’ (TFV), specifically the TFVO, from the Islamic perspective. The paper is considered as the first paper that contextually analyses this issue based on Islamic legal sources using a qualitative approach. In addition, the paper has contributed to the literature in Islamic accounting and auditing. Article literatinetwork@emeraldinsight.com (Abang Salihin, A. H. Fatima, Abdulrahman Anam Ousama) Tue, 02 Sep 2014 00:00:00 +0100 The relationship between capital structure and performance of Islamic banks http://www.emeraldinsight.com/journals.htm?issn=1759-0817&volume=5&issue=2&articleid=17115151&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - As newcomers to the markets, Islamic Banks (IBs) are facing a trade-off. They can either employ high capital ratios which increase the soundness and safety of the bank and lower the required return by investors, or depend on deposits and Islamic bonds which are considered cheaper sources of funds due to their tax rebate. An IB’s management must carefully decide the appropriate mix of debt and equity, i.e., capital structure, in order to maximize the value of the bank. This study examines the effect of capital structure on IBs’ performance to provide guidance to finance managers for raising capital funds. <B>Design/methodology/approach</B> - Using a sample of 85 IBs covering banking systems in 19 countries, the study uses a two-stage least squares (2SLS) method to examine the performance determinants of IBs’ in order to control the reverse causality from performance to capital structure. <B>Findings</B> - After control of the macroeconomic environment, financial market structure and taxation, results indicate that IBs’ performance (profitability) responds positively to an increase in equity (capital ratio). The result is consistent with the signaling theory which predicts that banks expected to have better performance credibly transmit this information through higher capital. Optimal capital structure results of the IBs found a non-monotonic U-shaped relationship between the capital-asset ratio and profitability, supporting the efficiency risk and franchise value hypotheses.<B>Research limitations/implications</B> - Due to limitations for market data, the study uses book accounting ratios. Future research where market data is available could use performance measures, such as Tobin’s Q in performance determinants models. <B>Practical implications</B> - The non-monotonic relationship found between Islamic Banks’ return on equity and capital ratios suggest that equity issuances for Islamic Banks’ with low capital ratios (lower than the turning point of 37.41%) are expensive and have a negative effect on their profitability. On the other hand, managers of well capitalized Islamic Banks (Banks with capital ratios beyond 37.41%) are advised to rely on equity when faced by a decision to raise capital since the capital ratio starts to affect their profitability positively. <B>Originality/value</B> - Islamic banking literature has been silent on Islamic Banks' capital structure and its relevance, this study will try to fill in the existent gap. Article literatinetwork@emeraldinsight.com (Lama Tarek Al-Kayed, Sharifah Raihan Syed Mohd Zain, Jarita Duasa) Tue, 02 Sep 2014 00:00:00 +0100 Determinants of zakah (Islamic tax) compliance behavior http://www.emeraldinsight.com/journals.htm?issn=1759-0817&volume=5&issue=2&articleid=17115135&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The purpose of the study was to examine factors influencing business zakah compliance behavior. <B>Design/methodology/approach</B> - The theory of reasoned action (TRA) was adopted to investigate whether attitude, subjective norm and intention were the determinants of zakah compliance behavior based on questionnaire survey of 227 active businessmen in one district in Malaysia.<B>Findings</B> - Results indicate intention to be a significant predictor for zakah compliance behavior. Intention is further found to be influenced by both attitude and subjective norm and it mediates the relationship between both factors with business zakah compliance behavior.<B>Practical implications</B> - Since attitude, subjective norm and intention are found to influence business zakah compliance behavior, zakah institutions should give serious attention on these factors to improve their zakah collection in the future.<B>Originality/value</B> - The study supports the argument that in a loosely regulated environment like zakah, the theory of reasoned action can still effectively explain the behavior of zakah compliance. Article literatinetwork@emeraldinsight.com (Ram Al Jaffri Saad, Roszaini Haniffa) Tue, 02 Sep 2014 00:00:00 +0100 Islamic environmental ethics http://www.emeraldinsight.com/journals.htm?issn=1759-0817&volume=5&issue=2&articleid=17115162&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - To elaborate and discuss key Islamic principles of relevance to environmental ethics and sustainability agendas and reflect on implications for the operations of Islamic Financial Institutions (IFIs)<B>Design/methodology/approach</B> - An exploration of the tenets of environmental sustainability enshrined in Islamic Shariah through a review of key Islamic texts and relevant prior literature.<B>Findings</B> - The Islamic approach to the environment is holistic and unequivocal. Qur'anic verses describing nature and natural phenomena outnumber verses dealing with commandments and sacraments. Centrality of the environment in the Shari’ah and the Islamic injunction to command right and forbid wrong, are suggestive of an affirmative sustainability agenda for Islamic Financial Institutions.<B>Practical implications</B> - Implications and opportunities for corporate managers, environmental movements, and policy makers.<B>Originality/value</B> - By encouraging Muslim engagement in Ijtihad contribute to conceptual development within Islam. It will also be of value to accountability and ecology researchers seeking a better understanding of ecological practices and the internal histories of religions. Article literatinetwork@emeraldinsight.com (Riham R. Rizk) Tue, 02 Sep 2014 00:00:00 +0100