A comparative study of Indonesian and Malaysian Islamic banks

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.

The risk of bankruptcy is affected by many different factors. Therefore, identifying the groups of factors affecting bankruptcy risks, especially financial performance factors, are important and necessary. The study focused on the impact of financial performance on the bankruptcy risk of real estate companies listed on Vietnam’s stock exchange. Research data were collected from 44 real estate companies listed on Vietnam’s stock exchange from 2011 to 2017 with 308 observations. The study was conducted by the quantitative method based on the logistic regression model with the help of SPSS 25 specialized software. The research results show that Return on Assets (ROA), Return on Equity (ROE) and Total Asset Turnover (TAT) have significant reverse effects on bankruptcy risk, while Operating Profit Margin (OPM) is not a relevant factor. The accuracy rate of the overall predictive model is 90.9%. This study extends the scope of literature on the impact of financial performance on the bankruptcy risk of real estate companies. Moreover, this study offers the model of bankruptcy risk prediction of the listed real estate companies in Vietnam and recommends effective solutions to improve business efficiency, limit and prevent financial risks for listed real estate companies in Vietnam.

The current study is aimed at analyzing the impact of intellectual capital on the performance of Sharia-compliant banks in Saudi Arabia for the period 2013–2018. The intellectual capital efficiency has been measured by applying a widely-used proxy to intellectual capital, i.e., Value Added Intellectual Coefficient (VAIC). A multiple linear regression method, based on panel data using the pooled Ordinary Least Squares (OLS), was exerted. Regression equations were obtained to determine the impact of VAIC and its components (Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE)) on the financial performance of banks, designated as Return on Assets (ROA) and Return on Equity (ROE). The study has found out that VAIC has a statistically significant impact on the financial performance of Sharia-compliant banks in Saudi Arabia. But VAIC components fail to have a significant impact on ROE. However, these components significantly affect ROA. The study concludes that Sharia-compliant banks in the Kingdom of Saudi Arabia should pay particular attention to Intellectual Capital (IC) in general and Human Capital (HC), Structural Capital (SC), and Employed Capital (EC) in particular to increase Return on Assets and financial performance as a whole.