Title: The relationship between the voluntary disclosure and financial reporting quality of Islamic banks: an empirical evidence from Yemen

Authors: Eissa A. Al-Homaidi; Ebrahim Mohammed Al-Matari; Suhaib Anagreh; Mosab I. Tabash; Nabil Ahmed Mareai Senan

Addresses: Faculty of Businesses, Al-Rowad University, Taiz, Yemen ' Department of Accounting, College of Business, Jouf University, Kingdom of Saudi Arabia; Faculty of Commerce and Economics, Amran University, Yemen ' Abu Dhabi School of Management, Abu Dhabi, UAE ' College of Business, Al Ain University, UAE ' Department of Accounting, College of Business Administration, Prince Sattam bin Abdul Aziz University, Kingdom of Saudi Arabia; Administrative Science College, Al-Baydha University, Yemen

Abstract: This study aims to empirically investigate the influence of voluntary disclosure on financial reporting quality of Islamic banks in Yemen. The study uses an un-weighted disclosure index, comprising 266 items. Financial reporting quality (FRQ) is measured by two models namely, Jones (1991) (FRQJONM) and Dechow and Dichev (2002) (FRQDDMD), while voluntary disclosure level is considered as an independent variable. The results show that FRQJONM has a significant effect on financial ratio (FINRAT), financial statement information (FINSTIN), corporate social disclosure (CORSD), and other information (OTHINF). In regards to FRQDDMD, the outcomes indicated that general knowledge (BAISCG), financial ratio (FINRAT), other information (OTHINF), and bank size (BANSIZE) have a significant impact on FRQDDMD. The study has significant implications in developing economies for both individual and financial institutional investors, regulators, and policymakers. The study adds a new contribution to Islamic finance industry, particularly in Yemen and for all other countries interested in the Islamic way of finance.

Keywords: Islamic banking sector; financial reporting quality; FRQ; voluntary disclosure level; Yemen.

DOI: 10.1504/IJBIS.2024.135971

International Journal of Business Information Systems, 2024 Vol.45 No.1, pp.1 - 34

Received: 10 Dec 2020
Accepted: 22 Jan 2021
Published online: 11 Jan 2024 *

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