The relationship between Shari'ah Supervisory Board and Zakat disclosure among Islamic banks in Malaysia

The purpose of this paper is to review the literature on the relationship between Shari'ah Supervisory Board (SSB) and Zakat disclosure in the financial statement of Islamic banks in Malaysia. It is based on the hypothesis that SSB relates positively to Zakat disclosure. The design of the paper is based on stakeholder theory and agency theory. Both of the theories discussed the need on the part of Islamic banks as the agent to stakeholders to provide sufficient information about the operation of the banks. The information which is communicated through the financial statements will assist the stakeholders in their decision making processes. Discussion in this paper attempts to shed lights on the importance of SSB in enhancing disclosure on Zakat. For SSB to be able to do that, we review literature on the education background of members (Islamic and non-Islamic) and size (number of members) of SSB. This paper is a conceptual paper with the aim of contributing towards a better understanding of the local reporting framework for Zakat and the paper also attempts to clarify that the Zakat structure in Malaysia is unique therefore foreign standard may not be appropriate for local adoption.