Brotherhood concept, Islamic accountability concept and Agency theory in relation to disclosure of annual report of zakat institutions: A proposed framework

• Main Authors: Sapingi, Raedah, Puat Nelson, Sherliza, Sheikh Obid, Siti Normala
• Format: Conference or Workshop Item
• Language: English
• Published: Pusat Pengajian Ekonomi, Fakulti Ekonomi Dan Pengurusan, Universiti Kebangsaan Malaysia 2017
• Subjects: H Social Sciences (General); H96 Public policy (General), Policy sciences
• Online Access: http://irep.iium.edu.my/58622/13/58622-Brotherhood%20concept.pdf; http://irep.iium.edu.my/58622/; http://www.ukm.my/fep/perkem/

Currently, theories and empirical works in disclosure study are clouded by the conventional perspective. Even though, there are efforts in discussing disclosure study based on Islamic view, nevertheless, it is still considered at the early stage. With regard to zakat institutions disclosure via annual report, the issue of accountability and information asymmetry have been raised in many past literatures. Realising the loopholes in theories of zakat institutions disclosure, thus, the study aims to propose a framework, by examining the two Islamic concepts i.e. brotherhood and Islamic accountability concept as well as conventional i.e. the agency theory, that would able to explain zakat institutions disclosure practices. Brotherhood concept introduces the idea of social justice, where zakat is seen as an antidote in ensuring the social-economic justice (al-adl) is attained, it promotes harmonious relationships with fellow human beings i.e. habl min al-nās, therefore in this context, the role of zakat institutions is to report their zakat activities via disclosure of zakat information in the annual report. While, accountability concept from Islamic perspective brings out the idea of primary and secondary accountability, zakat institutions are accountable to discharge their accountability to the users in relation to disclosure of zakat information. From conventional view, the agency theory describes agent- principal relationship. This section highlights interesting discussions, especially in providing justifications of using agency theory in this context. Finally, the application of the Islamic concepts and agency theory is then translated into a proposed framework. Pada masa ini, teori dan karya empirikal dalam kajian pendedahan diliputi oleh perspektif konvensional. Walau bagaimanapun, terdapat usaha untuk membincangkan kajian pendedahan berdasarkan pandangan Islam, namun ia masih dianggap pada peringkat awal. Berhubung dengan pendedahan maklumat institusi zakat iaitu laporan tahunan, isu akauntabiliti dan maklumat asimetri telah dibincangkan dalam banyak literatur masa lalu. Menyedari kekurangan dalam teori pendedahan makluamt zakat, maka kajian ini bertujuan untuk mencadangkan rangka kerja yang berdasarkan dua konsep Islam iaitu persaudaraan dan akauntabiliti Islam serta konvensional iaitu teori agensi, yang dapat menjelaskan amalan pendedahan institusi-institusi zakat. Konsep persaudaraan memperkenalkan idea keadilan sosial, di mana zakat dilihat sebagai penawar untuk memastikan keadilan sosial ekonomi dicapai, ia menggalakkan hubungan yang harmonis dengan sesama manusia iaitu habl min al-nā, oleh sebab itu dalam konteks ini, peranan zakat Institusi adalah melaporkan aktiviti zakat mereka melalui pendedahan maklumat zakat dalam laporan tahunan. Manakala, konsep akauntabiliti dari perspektif Islam membawa idea akauntabiliti utama dan sekunder, institusi zakat bertanggungjawab untuk menunaikan tanggungjawab mereka kepada pengguna berhubung pendedahan maklumat zakat. Dari pandangan konvensional, teori agensi menggambarkan hubungan ejen-prinsipal. Bahagian ini membawa perbincangan menarik, terutamanya untuk memberikan alasan penggunaan teori agensi dalam pendedahan maklumat laporan tahunan institusi-institusi zakat. Akhirnya, pemakaian konsep dan teori agensi Islam kemudian diterjemahkan ke dalam rangka kerja yang dicadangkan