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Sharia Supervisory Board, Board Attributes And Real Earnings Management In Islamic Banks

Author

Listed:
  • Sulaiman Musa

    (Universiti Brunei Darussalam, Brunei Darussalam)

  • Masairol Haji Masri

    (Universiti Brunei Darussalam, Brunei Darussalam)

  • Mahani binti Hamdan

    (Universiti Brunei Darussalam, Brunei Darussalam)

Abstract

This study examines how the Sharia Supervisory Board (SSB) moderates the effects of Board of Directors (BOD) characteristics on real earnings management (REM) of Islamic banks. Using unbalanced data encompassing 45 Islamic banks across 15 countries from 2012 to 2023, it documents a negatively significant influence of board size, independence, and expertise on REM. The influence of board’s diligence, however, is absent. The study further notes that the SSB index moderates the effect of BOD attributes on REM in Islamic banks. The findings hold important implications for policymakers and regulators in shaping regulations on SSB and BOD oversight functions to curb REM practices. The study also contributes to the literature by offering further empirical evidence on the relationship between corporate governance and REM in Islamic banks.

Suggested Citation

  • Sulaiman Musa & Masairol Haji Masri & Mahani binti Hamdan, 2025. "Sharia Supervisory Board, Board Attributes And Real Earnings Management In Islamic Banks," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 11(1), pages 147-174, March.
    • Handle: RePEc:idn:jimfjn:v:11:y:2025:i:1g:p:147-174
    DOI: https://doi.org/10.21098/jimf.v11i1.2354
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    More about this item

    Keywords

    REM; SSB index; BOD attributes; Islamic banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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