Compliance with AAOIFI guidelines in general presentation and disclosure by Libyan Islamic banks: Evidence from Gumhouria Bank

Abstract

Purpose

The purpose of this paper is to reveal the level of compliance with Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) guidelines in general presentation and disclosure in the financial statements of Fashlowm Islamic branch of the Gumhouria Bank as the biggest bank in Libya.

Design/methodology/approach

The study used two-dimensional analysis, which combines a questionnaire with content analysis. It allowed a better understanding of the picture than would have been provided by the questionnaire alone.

Findings

The results of this study indicate that the level of compliance with AAOIFI guidelines regarding general presentation and disclosure in the financial statements is low. Many reasons were identified as being behind such a low level. The lack of training programmes on AAOIFI standards was at the forefront of these reasons.

Research limitations/implications

The sample is limited to the Fashlowm Islamic branch of Gumhouria Bank. This is may not be true for other branches and banks. Further research is needed in this area.

Originality/value

The AAOIFI has existed for over 20 years, but little empirical research has been conducted into compliance with the standards developed by this body in the Libyan context. This paper helps to address this gap and provide a foundation for future research and development in this area. Moreover, the findings of this study may be useful to policy makers and legislators.

Citation

Ahmad, N.S.M. and Daw, A.S.D.B. (2015), "Compliance with AAOIFI guidelines in general presentation and disclosure by Libyan Islamic banks: Evidence from Gumhouria Bank", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 11 No. 2, pp. 90-99. https://doi.org/10.1108/WJEMSD-06-2014-0015