Earnings management behaviors under different monitoring mechanisms: The case of Islamic and conventional banks

By Omneya H. Abdelsalam, Panagiotis E. Dimitropoulos, Marwa Elnahass, Stergios Leventis. 2016

152 citations recorded by the source corpus.

We investigate the impact of organizational religiosity on the earnings quality of listed banks in the Middle East and North Africa region. We analyze Islamic banking institutions, which operate within strict religious norms and extended accountability constraints, and compare them with their conventional counterparts during 2008–2013. We find that Islamic banks are less likely to manage earnings and that they adopt more conservative accounting policies. Based on these findings, we argue that religious norms and moral accountability constraints in these organizations have a significant impact on financial reporting quality and agency costs, which have implications for both regulators and market participants.

Subfields: Accounting, Information Systems

View Paper: https://www.semanticscholar.org/paper/66cc99a4994da2a8b7410447fd58bf4aded3ce8f

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1. Abul Shamsuddin
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Citations in the corpus

• Risk in Islamic banking and corporate governance (2018, background): “…risk-taking to gain further insights into the efficacy of the dual governance system in Islamic banks.24 The SSB and regular boards together may exert a synergistic effect on risk-taking by strengthening both moral and legal accountabilities of Islamic bank managers (Abdelsalam et al., 2016).”