Awqaf Accounting and Reporting for Accountability: A Case Study of Awqaf S

Abstract

Awqaf (Islamic endowments) recently received an increased attention and interest by the Muslim community due to its proven socio-economics contribution (providing public goods) to the Ummah. However, it is found from the literature that the administration and management of awqaf institutions still need a lot of improvements. Among the problems faced is low quality accounting and reporting standards of awqaf funds and assets, and, the distribution of usufructs. Therefore, this study set out to shed light on Awqaf S contemporary accounting and reporting practices. This study used qualitative approach of case study, where a single case study method was applied. Data were collected from semi-structured interviews, archival documentation review and analyses. Physical observations on randomly selected awqaf properties were also conducted, to elicit primary data. Secondary data were gathered from the annual reports, news and other publications from the stated institution. It is found that Awqaf S was a highly regulated institution where its funds managed professionally. The institution contracted an investment company to manage a substantial proportion of the funds. In terms of accounting and reporting, Awqaf S is governed by several acts. The annual financial statements were up-to-date and audited every year both internally and externally. The usufructs were systematically distributed to beneficiaries. To increase transparency, Awqaf S annual report is available on-line. It is found that Awqaf S suffers from a lack of human capital resources. The study observed that proper awqaf accounting and reporting are vital to enhance the accountability of the Awqaf managers. Rules and regulations must be enforceable so that they are adhered to. This study significantly fills the gap in the contemporary literature of awqaf accounting, reporting and accountability.

Keywords: Awqaf, Islamic endowments, Islamic accounting, accountability, Sadaqah

JEL Classification: M41