The mediating role of financial governance on the relationship between financial management, Islamic work ethic and accountability in Islamic social enterprise (ISE)

In: Social enterprise journal, Band 17, Heft 3, S. 427-449

Abstract

Purpose
The purpose of this study is to examine the role of financial governance practices in influencing both financial management and Islamic work ethic practices to affect Islamic social enterprises (ISEs) accountability.


Design/methodology/approach
Questionnaires were administered to financial officers of 102 Malaysian ISEs. Data was analysed using Smart-PLS to examine the relationships between financial management, Islamic work ethic, financial governance and accountability.


Findings
Results of this study indicate direct relationship only exist between Islamic work ethic and accountability. The relationship between financial management and accountability are indirect through financial governance. Hence, the data proves that financial governance has a mediating role on both the relationships between financial management and Islamic work ethic with the accountability of the ISEs.


Research limitations/implications
The study has highlighted the greater role of financial management, Islamic work ethic and financial governance practices over accountability to achieve public trust, especially for Malaysian ISEs.


Practical implications
ISEs need to have good financial governance practices besides financial management and Islamic work ethic practices to achieve good accountability.


Originality/value
The study contributes to the field of management and social accounting by providing empirical evidence on the ISEs practices specifically on financial management, Islamic work ethic, financial governance and accountability. This framework thus presents amongst the first attempts in studying accountability issues in ISEs.