SHARIA COMPLIANCE AND ISLAMIC CORPORATE GOVERNANCE

doi:10.23969/trikonomika.v18i2.1465

Abstract

This study aims to examine the effect of sharia compliance and Islamic corporate governance on fraud in Sharia banks. Independent variables used are sharia compliance with Profit Sharing Ratio as a proxy and Islamic corporate governance. The dependent variable used is fraud. The population in this study is all Sharia Banks which is registered in Bank Indonesia in the period 2015 to 2017. The sample was selected using purposive sampling method. Sample size in this research as much as 33 Sharia Banks. Those total samples used in this study which consist of 11 Sharia Banks within 3-year study period. The analytical method used in this study is multiple linier regression.The results of this study indicate that the sharia compliance with the Profit Sharing Ratio as a proxy, has a negative effect on fraud in Sharia bank while Islamic corporate governance has no positive effect on fraud in Sharia banks.

Highlights

The success of Mit Ghamr Bank inspired many parties including the Organization of the Islamic Conference (OIC), which has members from various Muslim countries to establish the Islamic Development Bank (IDB) in 1973 (Yaya, 2014)
Expressed in rupiah; (2) Sharia banks that publish reports on the implementation of Islamic Corporate Governance in 2015-2017; and (3) Sharia Banks that disclose data relating to research variables completely, including fraud, sharia compliance which are proxied by the Profit Sharing Ratio, and Islamic Corporate Governance
This is consistent with research of (Falikhatun dan Yasmin, 2012), it is concluded that the implementation of sharia principles has a positive effect on the financial health of Islamic banks, and research of (Maharani, 2013) stated that the Islamic element applied in business ethics has a significant negative effect on fraud in financial report

Summary

Introduction

The success of Mit Ghamr Bank inspired many parties including the Organization of the Islamic Conference (OIC), which has members from various Muslim countries to establish the Islamic Development Bank (IDB) in 1973 (Yaya, 2014). The development of Islamic banking in Indonesia is increasingly rapid after the enactment of Law Number 21 of 2008 concerning Islamic Banking (Falikhatun dan Yasmin, 2012). This development can be seen from the number of banks and the number of offices both in Sharia Commercial Bank (BUS), Sharia Business Unit (UUS), or the Islamic People’s Financing Bank (BPRS)

Objectives

Methods

Findings

Discussion

Conclusion