Presenters: Aprisia Cesar Setyani, Devi Narulitasari
Affiliation: UIN Raden Mas Said Surakarta, Indonesia
Room: 8
ICIES News- The 4th International Conference on Islamic Economics Studies (ICIES) 2024 featured a noteworthy presentation titled “The Effect of Financial and Non-Financial Factors on Islamic Social Reporting Disclosure,” delivered by Aprisia Cesar Setyani and Devi Narulitasari from UIN Raden Mas Said Surakarta, Indonesia. The session, held in Room 8, attracted a diverse audience of academics and industry experts.
This research highlights the critical role of Islamic Social Reporting (ISR) in communicating a company’s social responsibilities to stakeholders, thereby helping to prevent social deviations and enhance the company’s reputation. The primary aim of the study was to analyze the influence of various financial factors (profitability, liquidity, and leverage) and non-financial factors (Islamic governance score and investment account holder) on ISR disclosure.
The study’s sample consisted of nine Islamic commercial banks continuously registered with the Financial Services Authority (OJK) from 2018 to 2022, resulting in a total of 45 observational data points. Employing multiple linear regression analysis with EVIEWS version 12, the researchers uncovered several significant findings:
- Investment Account Holders: This variable was found to have a positive impact on ISR disclosure. Banks with a higher number of investment account holders tend to have more comprehensive ISR practices.
- Profitability: Interestingly, profitability showed a negative influence on ISR disclosure. This suggests that more profitable banks might not prioritize ISR to the same extent.
- Liquidity, Leverage, and Islamic Governance Score: These factors did not demonstrate a significant impact on ISR disclosure according to the analysis.
The findings from Setyani and Narulitasari’s study provide valuable empirical contributions to the field of ISR disclosure. Practically, these insights offer important considerations for regulators at the Financial Services Authority (OJK) to enhance the guidelines and practices related to ISR among Islamic commercial banks.
Their presentation emphasized the complex dynamics between financial and non-financial factors in ISR disclosure, underlining the necessity for ongoing research and regulatory efforts to ensure robust and transparent social reporting within the Islamic banking sector.