2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance
| Format: | General Document |
|---|
| _version_ | 1860798091283660800 |
|---|---|
| building | INTELEK Repository |
| collection | Online Access |
| collectionurl | https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection3 |
| copyright | Copyright©PWB2025 |
| country | Malaysia |
| date | 2021-07-12 |
| format | General Document |
| id | 15883 |
| institution | UniSZA |
| internalnotes | Sila masukkan subject wajib Dissertations, Academic. Terima kasih... |
| originalfilename | THE MEDIATING ROLE OF EARNINGS QUALITY ON THE RELATIONSHIP BETWEEN ISLAMIC BANKING GOVERNANCE MECHANISMS AND FINANCIAL PERFORMANCE (PHD_2021).pdf |
| person | Siti Fariha Binti Muhamad |
| recordtype | oai_dc |
| resourceurl | https://intelek.unisza.edu.my/intelek/pages/view.php?ref=15883 |
| sourcemedia | Server storage Scanned document |
| spelling | 15883 https://intelek.unisza.edu.my/intelek/pages/view.php?ref=15883 https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection3 General Document Malaysia Library Staff (Top Management) Library Staff (Management) Library Staff (Support) Terengganu Faculty of Business and Management English application/pdf 1.5 Server storage Scanned document Universiti Sultan Zainal Abidin UniSZA Private Access Universiti Sultan Zainal Abidin SAMBox 2.3.4; modified using iTextSharp™ 5.5.10 ©2000-2016 iText Group NV (AGPL-version) Copyright©PWB2025 Corporate governance 331 Islamic banks and banking Financial performance Mediating Role 2021-07-12 THE MEDIATING ROLE OF EARNINGS QUALITY ON THE RELATIONSHIP BETWEEN ISLAMIC BANKING GOVERNANCE MECHANISMS AND FINANCIAL PERFORMANCE (PHD_2021).pdf Siti Fariha Binti Muhamad Earnings Quality Relationship Between Islamic Banking Governance Mechanisms And Financial Performance Earnings quality Financial reporting 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance Effective and sound corporate governance mechanisms (CGM) must be in place to ensure the accountability of key players in protecting the interests of all stakeholders. The past global financial crisis has shown that Islamic banks (IBs) were less exposed, resilient and stable from this financial meltdown. However, the financial performance (FP) of IBs is still left behind the conventional banks. The financial report plays a major role in delivering accurate information on banks’ FP. The existence of extra layer of Shari’ah governance mechanisms (SGM) in the IBs’ governance mechanisms (GM) is expected to further strengthen the existing CGM in IBs, in turn, helping to raise the financial reporting quality (FRQ) and FP. However, there is insufficient empirical evidence on how these dual layers of governance in IBs influence the FRQ and FP of IBs and the extent to which FRQ mediates this relationship. Thus, this study investigates whether IBs’ GM, comprising CGM and SGM, have a significant impact on earnings quality (EQ), as a proxy of FRQ and performance of IBs in Southeast Asia (SEA), Gulf Cooperative Council (GCC) and South Asia (SA) regions. This study also examines the mediating effects of EQ on the relationship of CGM and SGM and FP of IBs. This study tested sample panel data of 83 IBs in these three regions over a six-year period, from 2012 to 2017, using secondary data retrieved from financial reports, annual reports, and financial databases. The data was analyzed using the Fixed Effects model to estimate the direct effect of IBs GM on EQ and FP, and Structural Equation Modelling, based on Preacher and Hayes’s bootstrapping model, to estimate the indirect effect of EQ on IBs governance mechanisms and FP. The findings infer that the level of EQ and FP of IB are significantly related to IBs GM. The results of direct impact of IBs’ GM on EQ indicate that significant relationships exist between board independence (BINDE), audit committee expertise (ACEXP), Shari’ah Supervisory Board (SSB) size, SSB cross-membership, and internal Shari’ah audit (ISA) function; and discretionary loan loss provisions (DLLP), a measure of EQ. The results of direct impacts of IB’s GM on FP indicate that significant relationships exist between BINDE, audit committee size (ACSIZE), ACEXP, SSB size, SSB cross-membership, ISA function, and internal Shari’ah review (ISR) function; and return on average asset (ROAA), a measure of FP. The results are further supported by the return on average equity (ROAE), an alternative measure of FP. For the mediation effect of EQ, the findings prove that EQ has a significant impact on the relationship between IBs’ GM and FP, with consistent results of partial mediation effects for BINDE, ACSIZE, ACEXP, SSB size, SSB cross-membership, ISA, ISR function and external audit quality on both ROAA and ROAE. This study contributes to the body of knowledge on the CGM and SGM debate by providing evidence on the mediation effect of EQ on these relationships that may be of interest to the academic researchers, industry practitioners, regulators and policymakers. Dissertations, Academic Sila masukkan subject wajib Dissertations, Academic. Terima kasih... Thesis |
| spellingShingle | 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance |
| state | Terengganu |
| subject | Corporate governance Islamic banks and banking Financial performance Earnings quality Financial reporting Dissertations, Academic |
| summary | Effective and sound corporate governance mechanisms (CGM) must be in place to ensure the accountability of key players in protecting the interests of all stakeholders. The past global financial crisis has shown that Islamic banks (IBs) were less exposed, resilient and stable from this financial meltdown. However, the financial performance (FP) of IBs is still left behind the conventional banks. The financial report plays a major role in delivering accurate information on banks’ FP. The existence of extra layer of Shari’ah governance mechanisms (SGM) in the IBs’ governance mechanisms (GM) is expected to further strengthen the existing CGM in IBs, in turn, helping to raise the financial reporting quality (FRQ) and FP. However, there is insufficient empirical evidence on how these dual layers of governance in IBs influence the FRQ and FP of IBs and the extent to which FRQ mediates this relationship. Thus, this study investigates whether IBs’ GM, comprising CGM and SGM, have a significant impact on earnings quality (EQ), as a proxy of FRQ and performance of IBs in Southeast Asia (SEA), Gulf Cooperative Council (GCC) and South Asia (SA) regions. This study also examines the mediating effects of EQ on the relationship of CGM and SGM and FP of IBs. This study tested sample panel data of 83 IBs in these three regions over a six-year period, from 2012 to 2017, using secondary data retrieved from financial reports, annual reports, and financial databases. The data was analyzed using the Fixed Effects model to estimate the direct effect of IBs GM on EQ and FP, and Structural Equation Modelling, based on Preacher and Hayes’s bootstrapping model, to estimate the indirect effect of EQ on IBs governance mechanisms and FP. The findings infer that the level of EQ and FP of IB are significantly related to IBs GM. The results of direct impact of IBs’ GM on EQ indicate that significant relationships exist between board independence (BINDE), audit committee expertise (ACEXP), Shari’ah Supervisory Board (SSB) size, SSB cross-membership, and internal Shari’ah audit (ISA) function; and discretionary loan loss provisions (DLLP), a measure of EQ. The results of direct impacts of IB’s GM on FP indicate that significant relationships exist between BINDE, audit committee size (ACSIZE), ACEXP, SSB size, SSB cross-membership, ISA function, and internal Shari’ah review (ISR) function; and return on average asset (ROAA), a measure of FP. The results are further supported by the return on average equity (ROAE), an alternative measure of FP. For the mediation effect of EQ, the findings prove that EQ has a significant impact on the relationship between IBs’ GM and FP, with consistent results of partial mediation effects for BINDE, ACSIZE, ACEXP, SSB size, SSB cross-membership, ISA, ISR function and external audit quality on both ROAA and ROAE. This study contributes to the body of knowledge on the CGM and SGM debate by providing evidence on the mediation effect of EQ on these relationships that may be of interest to the academic researchers, industry practitioners, regulators and policymakers. |
| title | 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance |
| title_full | 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance |
| title_fullStr | 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance |
| title_full_unstemmed | 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance |
| title_short | 2021_The Mediating Role of Earnings Quality on The Relationship Between Islamic Banking Governance Mechanisms and Financial Performance |
| title_sort | 2021_the mediating role of earnings quality on the relationship between islamic banking governance mechanisms and financial performance |