The extent of voluntary disclosure in the annual reports of Islamic banks: empirical evidence from Yemen

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This article aims to measure the level of voluntary disclosure in the published annual reports of Yemeni Islamic banks. Four full-fledged Islamic banks from Yemen are selected for the current study. A disclosure checklist covering 266 items is prepared and a 10-year period, 2005–2014, is taken. The disclosure index items were classified into seven groups, such as basic information on Islamic banks, financial ratios, corporate governance information, financial statements data, corporate social disclosure, Zakat information, and other information that has been taken as an important attribute of voluntary disclosure. The obtained results show that the amount of voluntary disclosure that Yemeni Islamic banking institutions publish in their annual reports has gradually increased over the ten years examined. The results revealed that the highest average disclosure index score over the ten years was achieved by Tadhamon Islamic International Bank (TIIB), the second highest average disclosure score was obtained by Saba Islamic Bank (SIB), and the lowest average voluntary disclosure rating score during the ten years surveyed was achieved by Shamil Bank of Yemen & Bahrain in Yemen during the study period. Substantially, the result of voluntary disclosure scores indicates that the degree of voluntary disclosure by Yemeni Islamic financial institutions has relatively expanded during the ten years investigated. The findings provide new evidence for voluntary disclosure, particularly, Islamic disclosure items. The survey findings can be useful for regulators in Yemen to improve overall disclosure practices by Islamic banks operating in Yemen.

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    • Figure 1. The degree of voluntary disclosure groups
    • Table 1. Some empirical studies of Islamic banks
    • Table 2. Voluntary information categories
    • Table 3. TVDIS for each Islamic bank over the ten years (2005–2014)
    • Table 4. Descriptive TVDIS statistics over the ten years analyzed
    • Table 5. Developments of the degree of TVDIS over the 2005–2014 period
    • Table 6. Descriptive statistics for categories of the voluntary information disclosure index
    • Table A1. Voluntary disclosure index items
    • Conceptualization
      Eissa A. Al-Homaidi, Karrar Khalaf Allamy, Mosab I. Tabash
    • Investigation
      Eissa A. Al-Homaidi, Karrar Khalaf Allamy, Mosab I. Tabash
    • Methodology
      Eissa A. Al-Homaidi, Karrar Khalaf Allamy, Anwar Ahmad
    • Validation
      Eissa A. Al-Homaidi, Karrar Khalaf Allamy
    • Writing – original draft
      Eissa A. Al-Homaidi, Karrar Khalaf Allamy
    • Data curation
      Anwar Ahmad
    • Writing – review & editing
      Anwar Ahmad, Mosab I. Tabash
    • Software
      Anwar Ahmad
    • Visualization
      Anwar Ahmad, Mosab I. Tabash
    • Resources
      Mosab I. Tabash
    • Supervision
      Mosab I. Tabash