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The effects of good governance and fraud prevention on performance of the zakat institutions in Indonesia: a Sharīʿah forensic accounting perspective

The effects of good governance and fraud prevention on performance of the zakat institutions in... This study aims to investigate the direct and indirect effects of good governance and fraud prevention on the performance of Zakat institutions.Design/methodology/approachA theoretical model was developed based on stakeholder theory, and data were collected from Indonesian Zakat institutions through convenience sampling design. In total, 142 data sets were analysed using partial least squares-structural equation modelling statistical software.FindingsThe results showed that good governance and fraud prevention significantly impact the performance of Zakat institutions. Yet, there was no significant influence of the fairness principle of good governance on Zakat performance in either direct or indirect relationships with fraud prevention.Practical implicationsThe results indicated that Zakat institutions as trusted agencies should pay more attention to fairness implementations to avoid fraud. Furthermore, fairness is an early signal that accountants can use to detect either fraudulent or mismanaged Zakat distribution.Originality/valueThis paper provides the empirical justification for a theoretical model of Zakat performance that was conceptualized using good governance principles and Sharīʿah forensic accounting principles. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Islamic and Middle Eastern Finance and Management Emerald Publishing

The effects of good governance and fraud prevention on performance of the zakat institutions in Indonesia: a Sharīʿah forensic accounting perspective

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References (68)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1753-8394
DOI
10.1108/imefm-03-2019-0089
Publisher site
See Article on Publisher Site

Abstract

This study aims to investigate the direct and indirect effects of good governance and fraud prevention on the performance of Zakat institutions.Design/methodology/approachA theoretical model was developed based on stakeholder theory, and data were collected from Indonesian Zakat institutions through convenience sampling design. In total, 142 data sets were analysed using partial least squares-structural equation modelling statistical software.FindingsThe results showed that good governance and fraud prevention significantly impact the performance of Zakat institutions. Yet, there was no significant influence of the fairness principle of good governance on Zakat performance in either direct or indirect relationships with fraud prevention.Practical implicationsThe results indicated that Zakat institutions as trusted agencies should pay more attention to fairness implementations to avoid fraud. Furthermore, fairness is an early signal that accountants can use to detect either fraudulent or mismanaged Zakat distribution.Originality/valueThis paper provides the empirical justification for a theoretical model of Zakat performance that was conceptualized using good governance principles and Sharīʿah forensic accounting principles.

Journal

International Journal of Islamic and Middle Eastern Finance and ManagementEmerald Publishing

Published: Jul 27, 2021

Keywords: Accountability; Fraud; Forensic accounting; Zakat; Fairness; Legitimacy; Direction

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