Indebtedness Theory and Shariah Boards: A Theoretical Approach

Purpose: The current paper aims at elaborating a theoretical approach of responsibility of shariah board with Indebtedness theory in terms of a covenant, which establishes certain rights and obligations towards compliance of financial instruments with shariah rules. Design/methodology/approach: The...

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Bibliographic Details
Published in:Global business and management research 2018-01, Vol.10 (1), p.127-134
Main Authors: Ahmed, Essia Ries, Alabdullah, Tariq Tawfeeq Yousif, Amran, Azlan, Yahya, Sofri Bin
Format: Article
Language:English
Subjects:
Accounting
Advisors
Annual reports
Compliance
Disclosure
Epistemology
Financial instruments
Islamic financing
Islamic law
Legitimacy
Money market instruments
Muslims
Retailing industry
Social responsibility
Spirituality
Theory
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Summary:Purpose: The current paper aims at elaborating a theoretical approach of responsibility of shariah board with Indebtedness theory in terms of a covenant, which establishes certain rights and obligations towards compliance of financial instruments with shariah rules. Design/methodology/approach: The paper explored issues related to the theoretical approach of responsibility of shariah boards with Indebtedness by reviewing the responsibility of shariah boards towards the financial instruments and compliance with Islamic principles. Findings: The paper identified the Indebtedness duties imposed on shariah boards which are under the Islamic law. Shariah boards are a manifest of the Covenant (Al-Mithaq) and by way of submitting its desires to His Will (i.e. the Islamic Law) corresponding to an absolute true willingness as an indebtedness of the relationship between them and Allah the Creator. Research limitations/implications: The study was limited only to the theoretical approach of responsibility and duties of shariah board with Indebtedness. Practical implications: This study contributes to the literature by deconceptualizing and developing the responsibility and duties of shariah boards and presenting a systematic framework that demonstrates the underlying indebtedness theory through connecting with the financial instruments and shariah compliant. Originality/value: Indebtedness theory refers to a theory that deals with the human existence and the relationship with Allah, the Creator. Creations must submit to Allah and comply with Shariah rules as an act of obedience to Allah. However, the theory is extremely fundamental to illustrate the reasons why shariah board members dutifully observe Islamic rules in business conduct and financial operations.
ISSN:1947-5667