Development of Accounting Theory Based on Islamic Teachings: A Glance over Principle of Al-Adl and Al-Ihsan

The beauty of accounting based on Islamic principles is that it not only deals with the valuation but also deals with an inbuilt accountability mechanism. Generally the accounting should be able to perform roles like keeping safe custody of interests, certifying true and fair view of business, enabling accountability and providing reliable information for successful decision making to all the stakeholders. In this context there are three main issues with respect to present system of setting accounting standards. These are undue pressures of certain groups in setting these standards, no role of owners in setting these standards, and flexibility/discretion in applying these standards which may lead to subjectivity. These may results in incorrect valuation of business transactions, increasing management discretion which in return will increase corporate governance issues including incorrect financial reporting, earning management and limiting decision making ability of the stakeholders. In order to overcome to this situation there is an urgent need to revamp the accounting theory in such a way that when it is put into practice it performs its due role as being, discussed here. The best way to correct this situation is to develop a new accounting theory based on Divine guidance. In this background, the Islamic principles of “Amanah” (Custody) (Amer2007), “Shahadat” (Testimony), (Amer, 2008) “Shura” (Counseling) (Amer, 2012) and settlement in “Bay” (business transaction) (Amer, 2013) can lay down a solid foundation for a new accounting theory. In Islam the concept of AI-Adl and AI-Ihsan are leading and guiding principles. In this paper an effort has been made to look into that how these two concepts can be applied to accounting theory. Keywords: AI-Adl, AI-Ihsan, Accounting Standards, Financial Reportin

Communication Of Quantitative Information On Market Risk: An Experimental Investigation Into The Effectiveness Of Alternative Methods Of Disclosure.

This is an experimental study designed to test the claim that graphical presentation of quantitative information on market risk is superior to tabular display

The Sustainable Development Practices Role and Transformational Leadership: Interaction and Impact on the Financial Performance

The purpose of this study is to explore the direct relationship between sustainable development practices and financial performance. It also examines the moderating effect of transformational leadership approach on this relationship. Using primary data sources, this study presents a case study of the Jordanian construction industry. A survey of 290 managing directors or his appointed representative for 1113 construction companies in Jordan. Data were collected from October 2017 until April 2018. The multiple regression analysis and hierarchical multiple regression analysis are used to verify the hypotheses of this study. Analyzed data reveals a positive relationship among sustainability development factors (i.e. environmental, economic, social aspects) and financial performance. Furthermore, the result of hierarchical multiple regression has shown that the moderating effect of transformational leadership is significant only on the relationship between Environmental aspects and financial performance. Also, the transformational leadership does not moderate the impact of “Economic aspects and Social aspects†on the financial performance. This work strengthens the previous findings in the available literature as to how sustainability practices enhance the construction firms' performance. Moreover, this study involves the moderating role of transformational leadership on the main relation which also proves and supports the existing knowledge on performance measurement and performance of organisations. This study also contributes to practical aspects, by providing contractors with insights into implementing sustainability practices and tools to measure the sustainable construction firms' performance

The impact of surplus free cash flow and stock market segmentations on earnings management in Jordan: agency - and institutional - theory perspectives / Ahmad A. Toumeh, Sofri Yahya and Azlan Amran.

The current research aims at providing evidence concerning the influence of surplus free cash flow (SFCF) and stock market segmentations (SMS) on income-increasing earnings management practices in Jordan. The results, based on a sample of all non-financial companies that were listed on the Amman Stock Exchange (ASE) from 2013 to 2017, confirm the research hypotheses. The Huber-White’s sandwich standard errors for randomeffects regression was used as the primary statistical tool for this study. The findings revealed a significant and positive association between SFCF and income-boosting discretionary accruals (DAC). As well, the results found that SMS was significantly and positively associated with the positive DAC. This research adds value to scholarship by investigating the impact of SMS variable on earnings management. To the best available knowledge, this relationship has not been examined either in Jordan or elsewhere in the world. Further, this is the first empirical attempt to investigate the effect of SFCF on earnings management in Jordan, which provides meaningful information for companies seeking to understand and reduce agency problems within the Jordanian context

Employee retention, market orientation, and organizational performance – An empirical study

Every organization needs to attract, recruit and hold the best talent in today’s competitive environment to survive in the marketplace. The organizations can perform at their best level by utilizing all capabilities of their employees that is possible through employees’ retention. The purpose of this study was to examine the extent to which market orientation assists in achieving organization’s outstanding financial performance by retaining its core employees. A total of 300 self-administrative questionnaires were distributed and only 266 employees gave feedback. Out of 266, response of 18 employees was found incomplete. The data was analyzed with the help of SPSS software. The results demonstrated that market orientation has a significant role in employee retention as well as outstanding organizational financial performance. The outcomes of this study will help organizations understand the importance of market orientation in achieving superior organizational financial performance and in retaining key employees

Corporate Governance Development: New or Old Concept

Previous studies that dealt with Corporate Governance have concentrated on its importance and the necessity of its application. This paper has focused on the  history of corporate governance and its roots in the time that the audience and the majority of researchers believed that its existence and principles came by the rules of Sarbanes–Oxley Act and legislation in the United States of 2002. The experience of the auther over the years  in accounting and management and particularly in the discipline of corporate governance, in addition to depth literature review, all have been used to develop this research. It is concluded that despite common beliefs and debate for the period of corporate governance emergence in 2000s, corporate governance’s begining arose before a hundred of years. This study is important for investors and organizations as well to be aware of the necessity to apply corporate governance principles and mechanisms in all contries, being an ancient and precise system that has deep roots. This paper therefore provides useful information and clear picture to the researchers and practitioners about the reality of corporate governance’ history and roots. Keywords: Corporate governance, Agency theory, Histor

The relationship between reputation and infaq collection among Islamic private schools and the role of governance practice as moderator

Purpose - Islamic private schools are becoming recognised as playing an important role in providing alternative to national education system and furthering government’s objectives especially after the introduction of the Malaysian Syariah Index in 2015.As these schools mushrooming in number from year to year, it becomes increasingly tough for corporation and public to determine which schools to support financially.The contributions from various stakeholders are crucial since most of these schools rely on the funding to execute their missions and run their organisations.As reputation becoming the most critical, strategic, and enduring asset that an organisation possesses, study on reputation among private school and its affect to donation activities is still scarce.Therefore, this study proposed a conceptual framework of private school reputation and the infaq collection that applies resources based theory and stakeholder theory to the specifics of Islamic private school setting. This study aims to see the effect of school reputation and the moderating effect of governance practice to the infaq collection among Islamic private schools in Kelantan, Kedah and Perak.The central issue highlighted in this study is the insufficiency and unsustainability of infaq collection by these schools to finance their operations and development

Level Of Corporate Social Disclosure In Malaysia.

The research examines the level of corporate social disclosure among Malaysian listed companies during the period of recession of financial crisis and also during the pre and post financial crisis period

The Effect of Quality of Internal Corporate Governance Mechanisms on Investors’ Confidence: Evidence Among Indonesian Sharia Compliant Companies

This study investigates the effect of the quality of internal corporate governance mechanisms and investor confidence. Various efforts for corporate governance reform have been conducted in order to enhance investor confidence. Previous evidences showed that investors do not always concern with information disclosure about internal corporate governance mechanisms. As such this study attempted to investigate the linkage between information about four attributes reflecting the quality of internal corporate governance mechanisms and investor confidence.Based on 227 Sharia compliant companies included in List of Sharia Securities (Daftar Efek Syariah/DES) in Indonesia, this study found that firms size has significant influence on investor confidence.Meanwhile, the quality of internal corporate governance mechanism has also significant effect on investor confidence but with different direction.Board Structure and Board Composition as two out of four attributes for the quality of internal corporate governance mechanisms were positively related, while the other two attributes that are Board Process and Board Characteristics were negatively related to investors’ confidence.This evidence implied that the quality of internal corporate governance mechanisms have some influence on investors’ confidence