Gulate the Bomedemstat In Vivo reporting options out there to managers in presenting the firm’s monetary statements. This sort of regulation potentially reduces processing expenses for monetary statement customers by providing a usually accepted language that managers can use to communicate with investors” (Healy and Palepu 2001, p. 412). Though IAS/IFRS standards are deemed as the most globally accepted organization language, it was argued that these standards are not appropriate for Islamic banks. Additional particularly, IAS/IFRS standards don’t take into account the certain accounting therapy of IAH funds like disclosure in regards to the distribution of earnings involving shareholders and IAHs and smoothing practices of profit payouts to IAHs, which includes PER and IRR (Maali and Napier 2010; Suandi 2017). Similarly, as noted by Safieddine (2009), it was argued that “the monetary reporting rules set by the International Accounting Requirements as well as the Typically Accepted Accounting Principles don’t AS-0141 supplier reliably reflect the correct efficiency of Islamic banks” (p. 144). Hence, AAOIFI standards have been created to enhance the transparency of Islamic banks that would allow satisfying shareholders and IAHs’ details needs for choice making processes (Al Sadah 2007). Moreover, Karim (2001) highlighted the will need of adopting AAOIFI accounting requirements given that these standards especially cater towards the unique traits of Islamic banks. Certainly, AAOIFI provides Islamic accounting standards (AAOIFI FAS) on how you can report investment accounts and makes some disclosure specifications to them which include FAS N 5 “Disclosure of Bases for Profit Allocation in between Owners’ Equity and Investment Account Holders” and FAS N 6 “Equity of Investment Account Holders and Their Equivalent,” which present a much more uniform and transparent manner of accounting practice for IAH funds (Suandi 2017). Al-Baluchi (2006) located that the level of voluntary disclosure within the annual reports of Islamic banks enhanced following the implementation of AAOIFI standards. El-Halaby (2015) showed that the adoption of AAOIFI requirements features a considerable constructive association with economic disclosure in lieu of other sorts of disclosure, which reflects the significance on the implementation of these standards in all Islamic banks. Based on Sarea and Hanefah (2013), AAOIFI accounting requirements address the exceptional qualities of merchandise and services of Islamic monetary institutions. These standards allow them to improve the credibility and reliability of their monetary reports. Following Sarea and Hanefah (2013), this study uses a stakeholder theory that may possibly clarify the have to have of specific accounting requirements (i.e., AAOIFI accounting requirements) to establish the requirements of IAHs as big stakeholders of Islamic banks. We, consequently, set our third hypothesis as follows. Hypothesis 3 (H3). The adoption of AAOIFI requirements positively affects the amount of IAH disclosures in Islamic banks. 2.four. The Liquidity Level The level of liquidity can also be a vital indicator of banking solvency. Lahrech et al. (2014) identified in their study that bank liquidity has a important good effect on profit distribution to IAHs. The authors noted that higher liquidity will help Islamic banks to manage less profit-sharing ratios and distribute far more profit to IAHs. There are actually limited studies that examined the relationship amongst liquidity and corporate disclosure. In line with Watson et al. (2002), agency and signaling theories offer mixed results.