International Business Management

Year: 2016
Volume: 10
Issue: 30
Page No. 6830 - 6834

The Effect of Internal Control Implementation and Sharia Supervisory Board Role on the Quality of Financial Reporting in Zakat Management Organization

Authors : Elis Mediawati and Tettet Fitrijanti

Abstract: Public trust is closely related to the quality of the financial information which is presented by Zakat Management Organization (ZMO). The information will be useful if the information is able to support the community decision-making to entrust their zakat to ZMO. Sharia Supervisory Board (SSB) is a very important organ in the Islamic Financial Institutions (IFIs), SSB ensures all the objectives of Islamic governance are achieved which includes directing, reviewing and supervising all the activities of IFIs in order to adhere to sharia (Mediawati). Internal control is necessary to obtain the quality of financial reporting. Financial statements are credible information sources by the financial statements users to determine the performance of management and the company’s financial position. To produce quality financial reports it is required financial reporting quality. It should also be supported by internal control over quality financial reporting Internal control is necessary to obtain the quality of financial reporting (Mediawati). This study aims to determine the relation role of sharia supervisory board and internal control on the quality of financial reporting. The method which is used in this study is a survey method. The unit of analysis in this study is the ZMO in Indonesia. The respondents in this study are director, member of the supervisory board of sharia as well as Zakat collection and utilization. The hypothesis testing uses moment product moment correlation and coefficient of determination (R2). The result of this research is the relation of sharia supervisory board role and internal control with the quality of financial reporting is positive and very strong.

How to cite this article:

Elis Mediawati and Tettet Fitrijanti, 2016. The Effect of Internal Control Implementation and Sharia Supervisory Board Role on the Quality of Financial Reporting in Zakat Management Organization. International Business Management, 10: 6830-6834.

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