Compliance with AAOIFI guidelines in general presentation and disclosure by Libyan Islamic banks. Evidence from Gumhouria Bank
| Date | 11 May 2015 |
| DOI | https://doi.org/10.1108/WJEMSD-06-2014-0015 |
| Pages | 90-99 |
| Published date | 11 May 2015 |
| Author | Nassr Saleh Mohamad Ahmad,Abdu Samia Daw Ben Daw |
| Subject Matter | Strategy,Business ethics,Sustainability |
Compliance with AAOIFI
guidelines in general
presentation and disclosure
by Libyan Islamic banks
Evidence from Gumhouria Bank
Nassr Saleh Mohamad Ahmad and Abdu Samia Daw Ben Daw
Business School, Libyan Academy, Tripoli, Libya
Abstract
Purpose –The purpose of this paper is to reveal the level of compliance with Accounting and
Auditing Organisation for Islamic Financial Institutions (AAOIFI) guidelines in general presentation
and disclosure in the financial statements of Fashlowm Islamic branch of the Gumhouria Bank as the
biggest bank in Libya.
Design/methodology/approach –The study used two-dimensional analysis, which combines a
questionnaire with content analysis. It allowed a better understanding of the picture than would have
been provided by the questionnaire alone.
Findings –The results of this study indicate that the level of compliance with AAOIFI guidelines
regarding general presentation and disclosure in the financial statements is low. Many reasons were
identified as being behind such a low level. The lack of training programmes on AAOIFI standards
was at the forefront of these reasons.
Research limitations/implications –The sample is limited to the Fashlowm Islamic branch of
Gumhouria Bank. This is may not be true for other branches and banks. Further research is needed
in this area.
Originality/value –The AAOIFI has existed for over 20 years, but little empirical research has been
conducted into compliance with the standards developed by this body in the Libyan context.
This paper helps to address this gap and provide a foundation for future research and development in
this area. Moreover, the findings of this study may be useful to policy makers and legislators.
Keywords Compliance, Two-dimensional analysis, Libya, AAOIFI,
Guidelines regarding general presentation and disclosure in financial statements,
Fashlowm Islamic branch, Gumhouria Bank
Paper type Research paper
Introduction and background
The commercial banking sector in Libya comprises several banks, some of which are
state-owned commercial banks (five banks) and some are private commercial banks
(nine banks). In addition, there is the Central Bank of Libya (CBL) which is considered
to be the coordinator and monitor of the sector. CBL was established in 1951 and
started on 1 April 1956, backed by the Libyan Monetary Committee (Khafafa and
Shafii, 2013).
However, Stela and Bardai (2013) summarised the results of the previous studies on
the extent of the satisfaction of customers and staff at Libyan banks as follows:
customer dissatisfaction stems from commercial banking services that require interest
rates on loans, which is forbidden by Islam; owners refuse to deal with bank s because
of interest, and as result, the banking system will be short of cash; citizens only
deal with banks operating in Libya because such behaviour is imposed on them.
World Journal of
Entrepreneurship, Management
and Sustainable Development
Vol. 11 No. 2, 2015
pp. 90-99
©Emerald Group Publishing Limited
2042-5961
DOI 10.1108/WJEMSD-06-2014-0015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5961.htm
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WJEMSD
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