Compliance with investment account holders’ transparency and disclosure requirement: evidence from the Middle East and North Africa region

Purpose - The purpose of this paper is to construct an investment account holders' transparency and disclosure (IAH-T&D) index based on the new and revised accounting standard for investment accounts of the Accounting and Auditing Organization for Islamic Financial Institutions Standards (AAOIFI) (2020). It also aims to measure and compare the compliance level with IAH-T&D over years and between countries. Design/methodology/approach - This study uses the content analysis method to analyze the content of 270 annual reports across 30 Islamic banks (IBs) in 10 Middle East and North Africa countries during the period from 2010 to 2019. Findings - This study introduces a new IAH-T&D index which consists of 27 items representing four categories: investment accounts disclosure (11 items), incentive earnings disclosure (1 item), allocations and reserve disclosure (4 items) and general requirements for disclosure (11 items). The analysis shows that the level of IAH-T&D is 51%. The level of compliance varies over the years and across countries. Originality/value - To the best of the authors’ knowledge, this is the first study that offers an original self-constructed-T&D index that could enhance future research related to determinants and consequences of IAH-T&D practice in IBs.