Disclosure Of Corporate Zakat Among Muslim-Owned Companies In Malaysia

Mazni Abdullah; Noor Sharoja Sapiei; Siti Noraiysah Rohim

Authors

Mazni Abdullah Associate Professor
Noor Sharoja Sapiei Senior Lecturer
Siti Noraiysah Rohim Research Assistant

Keywords:

Corporate, Zakat, Disclosure, Muslim-owned, Companies

Abstract

The objective of this study is to examine the disclosure of corporate zakat in the annual reports of Muslim-owned companies in Malaysia. A total of 180 annual reports of Muslim-owned companies have been analysed, spanning a five-year period from 2014 to 2018. This study used a content analysis approach where a zakat disclosure checklist was developed. The findings show that only 34% of Muslim-owned companies disclosed their corporate zakat in their annual reports. The level of zakat disclosure is poor, and from 2014 to 2018, there was little progress in zakat disclosure. The findings imply that either Muslim-owned companies place less importance on the disclosure of corporate zakat or the contribution of corporate zakat among Muslim-owned companies is still low. The results of this study may provide zakat institutions and other relevant parties with some information about corporate zakat and its disclosure in Muslim-owned companies' annual reports.

Downloads

Download data is not yet available.

Author Biographies

Mazni Abdullah, Associate Professor

Faculty of Business and Economics, University of Malaya.

Noor Sharoja Sapiei, Senior Lecturer

Faculty of Business and Economics, University of Malaya.

Siti Noraiysah Rohim, Research Assistant

Faculty of Business and Economics, University of Malaya.

References

Book

Abdul Kadir, M.R., Syed Adwam Wafa, S.M, Ibrahim, A. & Abdullah, A. 2018. Accounting for Business Zakat-A Guide for Zakat Assessment and Accounting Disclosure in Financial Reporting. Penerbit Universiti Sultan Zainal Abidin: Terengganu.

Abu Bakar, A., Ibrahim, M. & Md Noh, S. 2014. Zakat Management and Taxation. IBFIM: Kuala Lumpur.

Hafidhuddin, D. 2002. Zakat dalam Perekonomian Modern. Gema Insani Press, Jakarta, Indonesia.

Qardhawi, Y. 2000. Fiqh Al Zakah. Unpublised Manuscript, King Abdul Aziz University. Translated into english by Dr. Monzer Kahf.

Zaaba, Nurul Iffah M A, & Mohd Ariffin. N. 2018. Zakat Computation and Disclosure by Malaysian Islamic Banks. In: E-Book of Masjid, Zakat and Waqf Management 2018, 4, 1–11. Bangi, Selangor, Malaysia.

Journal

Abd Samad, K. & Said, R. 2016. Zakat Disclosure by Malaysian Islamic Banks. International Business Management, 10(20), 4737-4742.

Abdul Rahman, A.R. 2007. Pre-requisites for effective integration of zakah into mainstream Islamic financial system in Malaysia. Islamic Economic Studies, 14(1), 91-107

Abdul Wahab, A. & Borhan, J. T. 2015. Kepatuhan Zakat Oleh Syarikat Tersenarai Awam Di Malaysia. The Journal of Muamalat and Islamic Finance Research 12, 69-85.

Abdullah, M. & Sapiei, N. 2018. Do religiosity, gender and educational background influence zakat compliance? The case of Malaysia. International Journal of Social Economics, 45 (8), 1250-1264

Adnan, M.A. & Abu Bakar, N.B. 2009. Accounting treatment for corporate zakat: a critical review. International Journal of Islamic and Middle Eastern Finance and Management, 2(1), 32-45.

Ahmed Sawmer, A. & Mohammed, M. O. 2021. Enhancing zakat compliance through good governance: a conceptual framework. ISRA International Journal of Islamic Finance, 13 (1), 136-154.

Baydoun, N., & Willett, R. 1997. Islam and Accounting: Ethical Issues in the Presentation of Financial Information, Accounting, Commerce & Finance: The Islamic Perspective, 1(1), 1-25

Baydoun, N., & Willett, R. 2000. Islamic Corporate Reports. ABACUS, 36(1), 71-90.

Haniffa, R. & Hudaib, M. A. 2002. A theoretical framework for the development of the Islamic perspective of accounting. Accounting, Commerce and Finance: The Islamic Perspective Journal, 6, 1-71.

Hooks, J., Coy, D., & Daves, H. 2002. The information gap in annual reports. Accounting, Auditing & Accountability Journal, 15 (4), 501-522.

Htay, S.N. & Salman, S.A. 2014. Proposed Best Practices of Financial Information Disclosure for Zakat Institutions. A Case Study of Malaysia. World Applied Science Journal, 30, 288-294.

Johari, Ab. Aziz, M.R. & Mohd Ali, A.F. 2014. A Review on Literatures of Zakat Between 2003-2013. Library Philosophy and Practice (e-journal), paper 1175.

Kilcullen, L., Hancock, P., & Izan H. Y. 2007. User requirements for not-for-profit entity Financial reporting: An international comparison. Australian Accounting Review, 17 (1), 26-37.

Maali, B., Casson, P. & Napier, C. 2006. Social Reporting by Islamic Banks. ABACUS, 42(2), 266-289.

Mohd Ariffin, Noraini & Osman, Ahmad Zamri. 2022. Zakat Computation And Disclosure Practice In Malaysian Islamic Banks. Asian Journal of Accounting Perspectives. Vol. 15, No. 2, 44-65.

Muhammad, F. & Mohd Hanefah, M. 2020. Zakat Disclosure by Malaysian Shariah-Compliant Companies. International Journal of Zakat and Islamic Philanthropy, 2(1), 210-217.

Owoyemi, M. Y. 2020. Zakat management: The crisis of confidence in zakat agencies and the legality of giving zakat directly to the poor. Journal of Islamic Accounting and Business Research, 11(2), 498-510.

Ram Al Jaffri Saad, Norazita & Norfaezah 2014. Islamic accountability framework in the zakat funds management. Procedia-Social and Behavioral Sciences 164, 508-515.

Sarea, A. M., & Hanefah, M. M. 2013. Adoption of AAOIFI accounting standards by Islamic banks of Bahrain. Journal of Financial Reporting and Accounting, 11(2), 131-142.

Saxton, G. D. & Guo, C. 2011. Accountability online: Understanding the web based accountability practices of nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 40 (2), 270-95.

Swift, T. 2001. Trust, reputation and corporate accountability to stakeholders. Business Ethics: A European Review, 10(1), 16-26

Colloquium & Conference

Hamat, Z. 2009. Business zakat accounting and taxation in Malaysia. A paper presented at the conference on Islamic perspectives on management and finance. University of Leicester, United Kingdom, 2 nd – 3 rd July 2009.

Md Noor, R., Nik Mohd Rashid, N.M.F, & Mastuki, N. 2011. Zakat and Tax Reporting: Disclosure Practices of Shariah Compliance Companies. Paper presented at Colloquium on Humanities, Science & Engineering Research, 5-6 December, 2011, Penang, Malaysia.

Thesis

Zulkepli, S. Z. 2013. Voluntary Financial and Non-Financial Disclosure on Zakat in the Financial Reports of Islamic Banks in Malaysia. Unpublished master’s degree dissertation. International Islamic University Malaysia. https://lib.iium.edu.my/mom/services/mom/document/getFile/wEV0Pklp4gey4BAePIBGgJ2Q gRbH283420140228115428316