Exploring The Relationship Between Board And Shariah Governance Quality And Cosmetic Accounting During Covid-19 A Conceptual Study Of Malaysian Financial Institutions

Suzilawati, Uyob and Nurul Adillah Yusof and Wan Rosnah, Awg Isa and Ana Salwa, Md Zin and Muhhammad Hassan and Aza Azlina Md Kassim and Rani Eka Diansari (2025) Exploring The Relationship Between Board And Shariah Governance Quality And Cosmetic Accounting During Covid-19 A Conceptual Study Of Malaysian Financial Institutions. Advanced International Journal of Business, Entrepeneurship and SME'S, 7 (26). pp. 480-492. ISSN 2682-8545

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Abstract

The COVID-19 pandemic has intensified financial pressures on banking institutions, raising concerns about the integrity of financial reporting practices. This conceptual study explores the relationship between board governance and Shariah governance quality and the prevalence of cosmetic accounting practices among Malaysian financial institutions during the COVID-19 crisis. Anchored in Bank Governance Theory, the study examines how the structure, independence, and effectiveness of both conventional boards and Shariah supervisory boards influence the tendency to engage in cosmetic accounting as a response to external shocks. Malaysia's dual banking system provides a unique context to assess how governance mechanisms within Islamic financial institutions interact with crisis-related incentives to present an enhanced but potentially misleading financial image. The study also considers how the pressures and disruptions caused by the pandemic may have altered the governance-accounting dynamic. By developing this conceptual model, the study aims to contribute to the broader discourse on governance and ethical financial reporting, offering insights for policymakers, regulators, and practitioners seeking to strengthen corporate governance standards in the post-pandemic financial landscape.

Item Type:	Article
Uncontrolled Keywords:	Board Governance, Shariah Governance, Cosmetic Accounting, COVID-19, Malaysian Financial Institutions
Divisions:	Faculty of Business and Accountancy (FABA)
Depositing User:	LIBRARY2 UPTM
Date Deposited:	17 Sep 2026 08:26
Last Modified:	17 Sep 2026 08:26
URI:	http://eprints.uptm.edu.my/id/eprint/6186

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