Influence of Sharia Supervisory Board Characteristics on the Shariah Compliance

Abstract

The purposes of this study are to identify the influence of SSB Characteristics on Shariah Compliance of AAOIFI Disclosure and to examine the influence of Shariah Supervisory Board (SSB) Characteristics on Shariah Compliance of AAOIFI Disclosure related to shariah supervisory board (SSB). The population of this study comprises financial firms operating in compliance with the Shariah principles in the Indonesian islamic banking. This research concentrates on the annual report of islamic banking, although firms may use other media of communication, such as public relations and internet sites to demonstrate shariah compliance disclosure. SSB characteristics are presented in the experience of SSB, meetings of SSB and cross membership of SSB. The findings of the regression analysis show a positive influence between Cross Membership on the Shariah Compliance Disclosure at one per cent significance level. While, the regression analysis shows a not positive influence between the Shariah Compliance Disclosure between meeting of SSB and experience of SSB. The significance of the cross membership of SSB suggests that the cross membersip off is influential factor in determining Shariah Compliance Disclosure.