Examining the role of sharia supervisory board attributes in reducing financial statement fraud by Islamic banks
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Author(s)Indah AnisykurlillahLink to ORCID Index: https://orcid.org/0000-0003-1307-5506
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Prabowo Yudo JayantoLink to ORCID Index: https://orcid.org/0000-0002-5532-8324
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Hasan MukhibadLink to ORCID Index: https://orcid.org/0000-0001-8979-5169
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Umi WidyastutiLink to ORCID Index: https://orcid.org/0000-0002-5871-3578
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DOIhttp://dx.doi.org/10.21511/bbs.15(3).2020.10
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Article InfoVolume 15 2020, Issue #3, pp. 106-116
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- 1440 Views
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255 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Sharia Supervisory Board (SSB) plays an important role in implementing Islamic law in Islamic banks, including fraud prevention. This ungodly act, also known as haram, is highly forbidden in Islam, as evidenced in the holy book of Al Qur’an. Therefore, this study was conducted to provide evidence on the role of SSB attributes (number of members, expertise, cross-membership, educational level, attendance of meeting, tenure) in preventing fraud. This study used 11 Islamic banks in Indonesia as research samples that were observed during 2014–2018. Data were analyzed using the ordinary least squares (OLS) method. The research findings from this study showed that the number of members, cross-membership, education level, attendance of meetings, and SSB tenure were not proven to reduce fraud. SSB’s expertise in accounting/finance had a negative influence on financial statement fraud. The implication of the study is that SSB’s expertise helps banks to effectively carry out their duties, namely detecting financial statement fraud. SSB acts as an independent control mechanism that states that all bank activities are in line with Islamic law and also avoid financial statement fraud.
- Keywords
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JEL Classification (Paper profile tab)G32, G24
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References62
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Tables3
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Figures0
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- Table 1. Descriptive analysis
- Table 2. Variables causality test
- Table 3. Ordinary least square test
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Detecting false financial statements: evidence from Greece in the period of economic crisis
Michail Pazarskis 
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George Drogalas ,
Kyriaki Baltzi
doi: http://dx.doi.org/10.21511/imfi.14(3).2017.10
Investment Management and Financial Innovations Volume 14, 2017 Issue #3 pp. 102-112 Views: 1390 Downloads: 544 TO CITE АНОТАЦІЯThe purpose of this study is the examination of the financial fraud in Greek companies, listed on the Athens Exchange for the period of 2008-2015 during the economic crisis in Greece. The data of all the listed companies that were used comprise financial statements, reviews in the reports by the auditors and the figures and information based on the reports of the Athens Exchange. A total of twelve companies were found and they comprise the primary research sample with fraud in their financial statements (FFS), while another twelve companies were employed as a control sample (non-FFS) for various comparisons. From thirty financial ratios, several statistical tests to the sample and the control sample are applied in order to create a model that will use ratios as “predictors” in the analysis of financial statements for fraud. The model is accurate in classifying the total sample correctly with accuracy rates exceeding 90 percent. The results demonstrate that the model functions effectively in detecting FFS in a period of economic crisis and could be used as a tool to the banking system, from internal and external auditors and taxation or other state authorities.
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Using the Beneish M-score model: Evidence from non-financial companies listed on the Warsaw Stock Exchange
Artur Hołda
doi: http://dx.doi.org/10.21511/imfi.17(4).2020.33
Investment Management and Financial Innovations Volume 17, 2020 Issue #4 pp. 389-401 Views: 1358 Downloads: 1507 TO CITE АНОТАЦІЯThe risk of distortion of financial statements has been growing. Following the 2008 crisis, recipients of financial information are increasingly focusing on the likelihood of financial statements being distorted through fraudulent presentation of financial information. Therefore, scientific research pays more attention to models capable of detecting financial statement manipulation.
The paper aims to present the principles of functioning and the possibility of using the Beneish M-score model in Polish realities. It analyzes the history of more than 30 companies listed on the Warsaw Stock Exchange to select those whose history indicates that they can be classified as manipulators, and to select the same number of companies from the control group that are considered as non-manipulators.
The research method involves the analysis of empirical data on companies listed on the Warsaw Stock Exchange.
The analysis showed the 8-factor Beneish model identified manipulators with 100% accuracy and succeeded in identifying non-manipulators. The effectiveness of the 5-factor model was much lower.
To serve the purpose of the study, the effectiveness of the Beneish model was tested on a small sample of Polish listed companies as an introduction to a planned larger scale research. The results obtained are consistent with the results of numerous studies by authors from various countries and confirm the effectiveness of the Beneish model in detecting financial statement manipulation.Acknowledgment
The publication is sponsored by funds from the Cracow University of Economics for the maintenance and development of research potential. -
A comparative study of Indonesian and Malaysian Islamic banks
Mochammad Chabachib ,
Anafil Windriya ,
Robiyanto ,
Hersugondo Hersugondo
doi: http://dx.doi.org/10.21511/bbs.14(4).2019.06
Banks and Bank Systems Volume 14, 2019 Issue #4 pp. 55-68 Views: 1323 Downloads: 162 TO CITE АНОТАЦІЯThe aim of this study is to analyze the influence of the non-performing financing (NPF), financing to deposit ratio (FDR), operational efficiency ratio (OER), and firm size (SIZE) on return on assets (ROA). The object of the research is the Islamic bank in Indonesia and the Islamic bank in Malaysia for the period of 2010–2015. Another aim of this research is to determine if there are differences in the impact of FDR, NPF, OER and firm size on ROA between the Islamic bank in Indonesia and the Islamic bank in Malaysia. The findings show that not all studied independent variables affect the ROA of the Indonesian Islamic Bank and the Malaysian Islamic bank. OER has a negative and significant effect on the Indonesian Islamic Bank’s ROA, while FDR and size have a positive and significant influence on the Indonesian Islamic Bank’s ROA. In the Islamic bank of Malaysia, NPF affects ROA positively, while OER affects ROA negatively. In the Indonesian Islamic bank, independent variables that influence ROA are FDR, OER, and SIZE. In Malaysian Islamic bank, only OER influences ROA significantly. Based on the Chow test, one can conclude that there is a significant difference between the Indonesian Islamic bank and the Malaysian Islamic bank. Regarding operational costs, banks should pay more attention to validation of the costs to be incurred, so there is no need to spend unnecessary costs.
