The Impacts of Internal Control Practices on Financial Accountability in Islamic Non-Profit Organizations in Malaysia
Keywords:Internal control, Islamic non-profit organization, Financial accountability, Islamic social accounting
This study aims at examining the impacts of internal control practices on financial accountability in Islamic non-profit organizations (NPOs) in Malaysia. Thus, this study applies an explanatory case study method to analyze intervention of life events which form the internal control practices. For data collection, this study used a shorter case study interview with interview protocol questions developed from the literature review. For reporting, this study adopted a multiple-case study format combining all three cases into a single report. As a result, this study identified significant interrelation impacts between internal control practices and financial accountability by Islamic NPOs in Malaysia under three aspects: (i) financial accountability ‘for what’ – internal control as part of financial accountability process; (ii) financial accountability ‘on how’ – internal control discharged financial accountability through financial disclosure; and (iii) financial accountability ‘to whom’ – internal control supports Islamic NPOs to gain both power (khilāfah) and trust (amānah) from stakeholders. Therefore, this study is among the few studies that examine the internal control practices especially their impacts on financial accountability of Islamic NPOs in Malaysia.
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