Abstract
Islamic banking has functions that are not merely oriented towards gaining profit but also related to social roles in society. Muhammad (2010) explain that financial report makers as part of companies tend to minimize reporting costs to ensure cost efficiency because their main goal is economic performance. On the other hand, users who represent the community expect Islamic banking to have social accountability because the existence of these companies is within the community. Therefore, the discussion about accountability of Islamic banking in the social field becomes interesting to be studied. This study aims to determine the perceptions of users and preparers of financial statements on the main objectives of Islamic banking social report, the motivation of Islamic banking to present social report, the potential groups of social report users and the information that must be disclosed on a social report. This study uses two types of respondents, namely the users represented by lecturers and students and the preparers represented by Islamic Bank employees in one of the big cities in Indonesia. The analytical method used is t-test and Multiple Response Analysis. The results of the study show that there are no differences in perceptions between the users and preparers of financial statements towards the main objectives of Islamic banking social report, the motivation of Islamic banking to present social report and potential users of Islamic banking social report. Meanwhile, there is the difference in perceptions between users and preparers of financial statements of information that must be disclosed in the Islamic banking social report.Keywords: Islamic Banking, Social Reporting in Islamic Perspective, Accountability.
Highlights
In the past ten years, the development of Islamic Banks has progressed rapidly
Sharia Banks are Banks that carry out their business activities based on Sharia principles and according to their types consist of Sharia Commercial Banks (BUS), Sharia Business Units (UUS), and Sharia Rural Financing Banks (BPRS)
The existence of Islamic Banking is closely related to social responsibility.Fitria and Hartanti (2010) stated that related to the need for disclosure of social responsibility in sharia banking, it is currently discussed about the Islamic Social Reporting (ISR).ISR is a standard item of Corporate Social Responsibility (CSR) established by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) which should be disclosed by an Islamic entityThe ISR index is believed to be a starting point in terms of CSR disclosure standards that are in line with the Islamic perspective
Summary
In addition to Sharia Banks, non-Bank Islamic financial institutions experience the same thing. It shows that the Islamic economic system can be well received by the Indonesian people who are predominantly Muslim. The existence of Islamic Banking is closely related to social responsibility.Fitria and Hartanti (2010) stated that related to the need for disclosure of social responsibility in sharia banking, it is currently discussed about the Islamic Social Reporting (ISR).ISR is a standard item of Corporate Social Responsibility (CSR) established by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) which should be disclosed by an Islamic entityThe ISR index is believed to be a starting point in terms of CSR disclosure standards that are in line with the Islamic perspective. Islamic banking is based on the principles of transparency. The principle of transparency makes Islamic Banking disclose company information to users of information in the form of financial statements
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