The impact of efficiency on discretionary finance loss provision: a comparative study of Islamic and conventional bank
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The issues of earning management has received attention from practitioners and academicians since the last couple of decades in banking sector. It is evident that bank managers practice the discretion in estimating loan/finance loss provisions for various motives such as reducing earnings variability (Agarwal, Chomsisengphet, Liu & Rhee, 2007; Kanagaretnam, 2004). Majority of the studies have been focusing on conventional banks, and only a few studies have focussed on Islamic banks, for instance, Zoubi and Al-Khazali (2007) and Othman and Mersni (2014). The significance of examining the issues in the context of Islamic banks stems from the fact that Islamic banks should not manage their earnings the way their conventional banks do. This is because the underlying theoretical basis of Islamic banks are based on Shariah principles which is different from conventional banks.
Islamic banking , Conventional bank , Loan/finance loss provision
Shawtari, Fekri Ali and Saiti, Buerhan and Shaikh Abdul Razak, Shaikh Hamzah and Abdul Kareem, Mohamed Ariff. (2016). The impact of efficiency on discretionary finance loss provision: a comparative study of Islamic and conventional bank. IF Hub, 2 (October 2016), pp. 14-18.