Hasan Mukhibad, - and Ahmad Nurkhin , FE Pendidikan Ekonomi (2019) Islamic Businees Ethics Disclosure and Earnings Management-Evidence from Islamic Banks in Indonesia. Journal of Islamic Finance, 8 (2). pp. 31-42. ISSN 2289-2117

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Abstract

This research is conducted to prove empirically the influence of Islamic business ethics disclosure, corporate governance, debt ratio, syirkah fund ratio and the profile of the Shariah Supervisory Board (SSB) towards earnings management. The samples are collected from Islamic commercial banks in Indonesia. Multiple regression analyses are employed in analyzing the data. From this research, it is found that (i) corporate governance, (ii) temporary syirkah funds, (iii) the size and educational level of the SSB, (iv) the syirkah fund ratio, and (v) the Islamic Ethics Disclosure Index or IEDI have negative impacts towards earnings management. The debt ratio, educational background of the members of SSB, and double membership of SSB do not have an impact on earnings management. Thus, the SSB should oversee the implementation of Islamic business ethics and avoid earnings management. Earnings management creates a false view of the performance of the Islamic bank, with respect to its profit and loss sharing system.

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