This study aims to develop an Accountability Disclosure Index (ADI) for Malaysian State Islamic Religious Councils (SIRC), concerning both quantity and quality. In this case, the quality of disclosure items was developed based on the qualitative characteristics, which rely on the International Financial Reporting Standards (IFRS) conceptual framework; namely, relevance, faithful representation, understandability, comparability and timeliness. Each characteristic was scored based on the ‘benchmark’ score, ranging from poor (1) to excellent (5). However, some of the characteristics have been modified to contextualize the SIRC study setting. Both quantity and quality of disclosure items index might contribute to a methodology for analysing and evaluating annual reports. Results show fifty-seven items of disclosure information, which were regarded by stakeholders relevant to be disclosed by the SIRC. Indeed, all these disclosure items should be disclosed in the SIRC annual reports, so as to meet the expectations of a wide range of stakeholders. With regard to the quality of disclosure, two different sets of qualitative characteristics for non-financial and financial statement disclosure were designed. All five qualitative characteristics were adapted to measure the quality of financial disclosure, whereas for non-financial disclosure, 'timeliness' was dropped due to the voluntarily nature of non-financial disclosure.

A good report should satisfy the expectations of the users based on their need of information. The present study views the users as a wide range of stakeholder groups as the concerned under the banner of public accountability, in which it explicates the right of the public to information about public sector organisations in discharging their accountability. Due to this, public managers are accountable to provide satisfactory information to the public for their actions and inactions to prevent any sanctions. SIRCs are not exempt. This study aims to identify the stakeholders’ expectations of information disclosure from the SIRCs annual reports by conducting an online questionnaire survey. Such annual reports consist of financial and non-financial information, the fact that the annual report is the only single document that can provide information comprehensively about the reporting entity as that commonly practiced among the companies. The findings reveal that both financial and non-financial information disclosure are important. External stakeholders expected more information from the SIRCs’ annual reports than SIRCs themselves. However, on average there is no significant difference in the responses of the disclosure items between internal and external stakeholders. But, there is significant difference across the six sub-stakeholder groups. Strategic information is the only information category significantly different. Nevertheless, comparing means for each of the disclosure item in every category of information, it infers several significant differences in their information expectations. As such, this study can be an avenue for future development of reporting framework to fairly satisfy the expectations of multiple stakeholders specifically for SIRCs in Malaysia yet it might be useful also for other not-for-profit (NPO), charities, religious bodies and public sectors in other countries.

This paper aims to identify factors that influence the expectations of a wide range of stakeholders on the information disclosure in the Malaysian State Islamic Religious Councils (SIRC) annual reports, employing semi-structured interviews. The majority of interviewees perceived accounting standards as the main factor contributing to their expectations and further influenced the reporting practices among accountants in SIRC. Others are state fatwa (Islamic rulings), audit expectations, and individual perceptions.The result of the interviews revealed that on the top of accounting standards and government guidelines on the reporting for all government agencies, SIRC should take into account their greater accountability, which should be reflected in their reporting practices. Therefore, Islamic accountability through fatwa, audit expectations, and public demands could be considered. Such awareness is important in SIRC, to differentiate them from other government agencies. The existence of governance is similar to the board of members in a company, in SIRC through the fatwa committee. Therefore, this study suggests that the extent and quality of disclosure depends on the demand from the regulators, auditors, and funders. The findings suggest that SIRC should have an incentive to provide more information to satisfy various stakeholders’ needs. Future studies can be carried out to suggest a set of disclosure items that should be disclosed in the SIRC annual reports in order to increase the level of disclosure, discharging their accountability. KEYWORDS disclosure, Islamic finance, accountability, State Islamic Religious Councils

This paper aims to identify whether Malaysian State Islamic Religious Councils (SIRC) financial characteristics have a significant impact on the accountability of Malaysian State Islamic Religious Councils (SIRC). A content analysis approach was used to examine the extent and quality of disclosure in the annual reports of SIRC, indicating accountability of SIRCs. This paper used the self-developed disclosure index that applies specifically for SIRC. Multiple regression was used to examine the financial determinants of the extent and quality of disclosure. The result of the regression models revealed that the extent and quality of SIRC disclosure is influenced by organisational characteristic, namely size. This study suggests that disclosure in the annual report, in particular the non-financial performance, increases with the amount of zakat collection, thereby demonstrating SIRC's responsibility. Next, the control variable of accessibility is found to be significantly related to financial statements. Obliged to produce financial statements, SIRC are more likely to disclose more information in the financial statements. This research finding has important implications for regulators, policymakers and top officials in SIRC, by monitoring the quality of disclosure, supporting the notion of public accountability, which appreciates the public's right to get inform about SIRC. Despite the voluntary disclosure of a non-financial report, SIRC should consider producing a comprehensive annual report for the discharge of their accountability and thus, encourage more funding. They should be more transparent to enhance accessibility, concerning the extent and quality of the disclosure.

This study investigates in-depth the performance reporting practices in Malaysian State Islamic Religious Councils (SIRC).Semi-structured interviews are conducted with accountants of SIRC and contributors, representing the public. Such interviews are carried out to discuss the current reporting practices. This study addresses the current performance reporting practices of State Islamic Religious Councils in Malaysia. It begins with the definition of performance reporting in the context of SIRC, it’s relevance, current practices and also recommendations for a more comprehensive performance reporting. The performance reporting essentially, is as part of an annual report, which expected by a wide range of stakeholders. Indeed, this study views that public accountability is pertinent, which appreciates the public’s right to get information about SIRC’s performance. A comprehensive corporate annual report should include performance reporting, indicating the importance of performance report not just financial performance but also non-financial performance. Particularly, for those organisations with not for profit oriented organisations like faith-based organisations, SIRC, zakat institutions, NGOs and even government agencies. Performance reporting studies in the context of not-for-profit organisations are at the infancy level. Despite the relevance of such report, similar non-profit organisations also could benefit from this study. Having a best reporting practice, non-financial performance aspects cannot be neglected so as to be seen being accountable to various stakeholders.

Purpose – This paper aims to examine stakeholders’ expectations of accountability in non-profit organisations (NPOs) in general, and State Islamic Religious Councils (SIRCs) in particular. Design/methodology/approach – An online survey was used to collect data, which was then analysed descriptively. Furthermore, the differences between stakeholder groups were evaluated using the Mann– Whitney and Kruskal–Wallis tests. Findings – The findings indicate that NPOs generally and SIRCs specifically need to clarify the meaning of accountability to meet the expectations of their stakeholders, especially the public, and to address accountability inquiries. Research limitations/implications – The research method was a limitation of this study. The data was collected using a survey. Generally, surveys contain restricted numbers and types of questions that the authors have outlined. Consequently, respondents might be constrained in their choice of how they perceive accountability. So, surveys used to collect respondents’ opinions may have an adverse effect on their responses. In addition, a number of respondents may also give superficial answers, particularly if they are required to answer a number of questions over a long period of time. Finally, the data collected using surveys might show what respondents think about accountability, but they do not show the actual practice. Practical implications – Owing the highest accountability to the Board of Directors is akin to the practices of corporations. The findings of this study could assist their top officials to understand the accountability chain within SIRCs. This is consistent with the findings regarding accountability within SIRCs, whereby they perceived that they are responsible to their board for performance. Therefore, this should encourage the reporting of performance to both internal and external stakeholders. Originality/value – Overall, perceptions on accountability are an ongoing debate, and they depend on the role of the organisation and expectations of stakeholders. Identifying a clear accountability chain is essential to develop the best reporting practices for SIRCs. The paper contributes to the literature by addressing two questions on accountability for NPOs: to whom and for what.