Shariah-related disclosure: a literature review and directions for future research

Abdulrahman, Zunaiba, Ebrahimi, Tahera ORCID: https://orcid.org/0000-0003-3130-9759 and Al-Najjar, Basil ORCID: https://orcid.org/0000-0003-2753-7142 (2024) Shariah-related disclosure: a literature review and directions for future research. International Journal of Disclosure and Governance, 21 (4). pp. 642-665. ISSN 1741-3591

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Abstract

A substantial scholarly discourse surrounds Shariah legislation, yet previous studies have offered limited evidence regarding the necessity of Shariah-related disclosure (SRD), its extent, determining factors, and its impact on performance. This paper seeks to provide a comprehensive review of existing SRD literature within Islamic institutions. To achieve this, we conducted a systematic literature review encompassing 44 studies published in journals from 2003 to 2023. The research articles were systematically categorized based on types of SRD, levels, methodologies employed, determining factors, and their consequent effects on performance. The findings underscore a significant knowledge gap and inconclusive results in the current literature, thereby identifying avenues for future research. Notably, our results indicate that the majority of prior studies are quantitative in nature and have employed secondary data from Islamic banks in Muslim countries. Likewise, research pertaining to other Islamic institutions and their voluntary adherence to Accounting and Auditing Organization for Islamic Financial Institutions guidelines is underreported. Furthermore, our findings suggest that previous studies have often placed undue emphasis on other forms of disclosure or have only considered SRD as a subset of broader categories. Contrarily, the number of studies on this subject has increased in recent years, with more than half of the surveys conducted in the last 8 years of the sample period. In forthcoming research, it is advisable to independently explore SRD and employ Islamic proxies to assess its impact on performance. Moreover, researchers are encouraged to investigate cross-industry differences in this context. The results of this survey will be of significant interest to both academics and non-academics seeking information on Shariah compliance disclosures.