Waqf quality reporting disclosures and performance of state Islamic religious council (SIRCs)

Abstract

Waqf reporting environment and practices have attracted attention due to increasing number of waqf resources in the growing waqf initiatives for both traditional and contemporary waqf assets. The pressing demands for greater accountability and better performance of the utilization of waqf assets and properties in Malaysia necessitates an implementation of a strong financial management system in State Islamic Religious Council (SIRC) institutions. This study aims to assess quality reporting disclosures of the SIRC by explaining how the quality of the reporting can be influenced to engage with the performance of waqf resources. This study employs legitimacy theory and stewardship theory as a basis. For the methodological choice, this study adopted mixed method research design. In mixed methods research, quantitative and qualitative techniques are combined in a sequential forms. To be more specific, this study adopted sequential exploratory research design by adopting the qualitative approach and then followed by quantitative approach. This study covers seven SIRC Institution from 2010 to 2019. This study employs Static Panel data for regression analysis to determine the impact of Waqf Reporting Disclosure Index (WRDI) on SIRC institution and Waqf resource performance. The finding indicates that Majlis Agama Islam Wilayah Persekutuan (MAIWIP) leading the score in WRDI both in Quantitative reporting disclosure index items and Qualitative reporting disclosure index items. Overall, most of the SIRC institutions have disclose more than 50 percent of the item indicator which is regarded as good practice. The findings of this study will help the SIRC Institution to develop guideline in reporting information disclosure and presentation of the annual report as well as financial statements. Indirectly it will enhance the comparability among SIRC Institution in their reporting presentation. Other that, SIRC Waqf institutions would be able to gain the trust of the waqif or donors by being transparent and disclose important information needed by them. Thus, by being transparency, the quality information disclosure will be able to delivered to the user.