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The Shariah Financial Accounting Standards: How they Prevent Fraud in Islamic Banking

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  • Tulus Suryanto
  • Ridwansyah Ridwansyah

Abstract

This study aims to investigate the influence of Shariah financial accounting standards, the independence of the Shariah Supervisory Board and Auditor Competency Shariah to the prevention of fraud in Islamic banks in Indonesia. Sampling using saturated sample or the entire population of as many as 48 people include auditors in Islamic banking and Islamic Supervisory Board analysis tool using regression analysis using F test and t test with SPSS ver.17.00. The results showed that the Shariah financial accounting standards, the independence of the Shariah Supervisory Board and Auditor Competency Shariah simultaneously affect the prevention of fraud in Islamic banks. Islamic financial accounting standards have significant effect on the prevention of fraud in Shariah banks. Variables such as independence of the partial Shariah Supervisory Board has no effect on the prevention of fraud in Shariah banks while Islamic auditor competence variables have partially significant effect on the prevention of fraud in Shariah banks.

Suggested Citation

  • Tulus Suryanto & Ridwansyah Ridwansyah, 2016. "The Shariah Financial Accounting Standards: How they Prevent Fraud in Islamic Banking," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 140-157.
    • Handle: RePEc:ers:journl:v:xix:y:2016:i:4:p:140-157
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    File URL: http://www.ersj.eu/repec/ers/papers/16_4_p12.pdf
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    References listed on IDEAS

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    1. Tulus Suryanto, 2014. "Determinants of Audit Fee Based on Client Attribute, Auditor Attribute, and Engagement Attribute to Control Risks and Prevent Fraud: A Study on Public Accounting Firms in Sumatra-Indonesia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 27-39.
    2. Tulus Suryanto, 2016. "Audit Delay and Its Implication for Fraudulent Financial Reporting: A Study of Companies Listed in the Indonesian Stock Exchange," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 18-31.
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    Cited by:

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    2. Purwanto & Ina Primiana & Dian Masyita & Erie Febrian, 2018. "Comparative Study οn Sustainability of Sharia Microfinance Institutions Through Financial and Social Efficiency," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 90-100.
    3. Iskandar Muda, 2017. "The Effect of Supervisory Board Cross-Membership and Supervisory Board Members' Expertise to the Disclosure of Supervisory Board's Report: Empirical Evidence from Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 691-705.
    4. Di, Li & Shaiban, Mohammed Sharaf & Hasanov, Akram Shavkatovich, 2021. "The power of investor sentiment in explaining bank stock performance: Listed conventional vs. Islamic banks," Pacific-Basin Finance Journal, Elsevier, vol. 66(C).
    5. Kharisya Ayu Effendi & Disman Disman, 2017. "Liquidity Risk: Comparison between Islamic and Conventional Banking," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 308-318.
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    7. Agus Eko Sujianto & Tulus Suryanto, 2018. "Income differences, trade and Institutions: empirical evidence form low and middle-income countries," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 217-228, April.
    8. Agus Zainul Arifin, 2017. "The Influence of Financial Knowledge, Control and Income on Individual Financial Behavior," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 635-648.
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    12. A.K. Zhukova & A.L. Zhukov, 2018. "Materiality in Audit of Financial Reporting Party Conducting Accounting of Joint Activity," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 109-118.
    13. L.S. Wiyantoro & F. Usman, 2018. "Audit Tenure and Quality to Audit Report Lag in Banking," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 417-428.
    14. Sugiharso Safuan, 2017. "Exchange Rate Volatility and Export Volume: The Case of Indonesia and its Main Trading Partners," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 3-13.
    15. Yonathan Sunyoto & Imam Ghozali & Agus Purwanto, 2017. "Analysis of Auditor Performance by Using Covariance Based Structural Equation Modeling: A Study of Public Accounting Firms in Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 524-537.
    16. L.S. Wiyantoro & F. Usman, 2018. "Audit Tenure and Quality to Audit Report Lag in Banking," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 417-428.
    17. Inta Bruna & Kastytis Senkus & Rasa Subaciene & Ruta Sneidere, 2017. "Evaluation of Perception of Accountant`s Role at the Enterprise in Latvia and Lithuania," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 143-163.

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