REPORTING DISCLOSURE LEVELS AND COMPLIANCE WITH BB, AAOIFI, B/IFRS AND SEC OF ISLAMIC FINANCIAL INSTITUTIONS IN BANGLADESH

Md Robiul Islam,Mohammad Shamsus Sadekin

doi:10.29040/ijebar.v4i02.1020

Abstract

Compliance with financial reporting guidelines/standards promulgated by Regulatory Bodies has become a crucial issue of the day after a series of corporate debacles over a few years. Regulators, professional bodies and researchers throughout the world have expressed their concern about the need for improved accounting pronouncements and compliance for providing better information than previously required for the preparation and presentation of corporate financial reporting. The present study primarily focuses on the reporting disclosure levels and compliance with Bangladesh Bank (BB) Guidelines, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Accounting Standard, Bangladesh/International Financial Reporting Standard (B/IFRS) and Securities and Exchange Commission (SEC) Rules of Islamic Financial Institutions in Bangladesh. Annual reports of (08) eight Islamic banks in Bangladesh have been examined for the year ending 2015. The results showed that the Islamic banks significantly followed the selected accounting guidelines/standards under review and did bring remarkable changes in the financial reporting practices made by the Islamic banks in Bangladesh. The study attempted to examine empirically the levels of disclosure in corporate annual reports of Islamic banks in Bangladesh. The study recommended increasing the level of compliance to make their financial reports more informative. The study also tries to ascertain the regulatory necessary requirements in preparing the financial statements of banks under Islamic shariah and tries to display the compliance status of these banks with legislations. The average compliance rate is 93.28% for BB guidelines, 46.54% for AAOIFI Accounting Standard, 48.50% for B/IFRS and 51.99% for SEC rules considering all required aspects of financial reports. Compiling all of the requirements regarding financial reports of regulatory bodies will be helpful for banks to make financial reports convenient.

Highlights

The stated objectives of establishing the regulatory bodies was to pronounce a set of accounting standards for the banking industries with a view to facilitating relevant, reliable, adequate and uniform disclosure of accounting information in the financial statements
As the regulatory bodies made the transition to adulthood, its focus has become harmonization of financial reporting irrespective of international boundaries
Scheduled Banks are classified into following types: state owned commercial banks (SOCBs) (6); specialized banks development finance institutions (SBDFIs) (2); private commercial banks (PCBs) (39); foreign commercial banks (FCBs) (9);

Summary

Introduction

The stated objectives of establishing the regulatory bodies was to pronounce a set of accounting standards for the banking industries with a view to facilitating relevant, reliable, adequate and uniform disclosure of accounting information in the financial statements. As the regulatory bodies made the transition to adulthood, its focus has become harmonization of financial reporting irrespective of international boundaries. This change in focus is due to banking companies, has increased the volume of economic exchanges across nations. The guidelines are to be followed by the Islamic banks and conventional commercial banks having Islamic branches, with a view to bringing greater transparency and accountability in Islamic

Objectives

Methods

Results