Analysis of Accounting Disclosure Quality as an Approach to Reducing Accounting Information Asymmetry in Islamic Banks: A Case Study of Al Baraka Islamic Bank – Syria

Abstract

This study analyzes the quality of accounting disclosure as an approach to reducing accounting information asymmetry in Islamic banks, with application to Al Baraka Islamic Bank – Syria over the period 2010–2024. It also interprets the disclosure trajectory in light of developments in the bank’s annual report structure and its financial and operational indicators. The study adopts a descriptive-analytical methodology and a case study approach supported by content analysis, relying on the bank’s published annual reports, financial statements, and accompanying notes. An annual disclosure index, comprising 105 items, was constructed based on the requirements of AAOIFI Financial Accounting Standard No. (1) on general presentation and disclosure. The findings indicate that the disclosure index increased from 75.24% in 2010 to 99.05% during 2021–2024, reflecting the bank’s transition from foundational disclosure to a high level of disclosure maturity. The study further finds that the improvement in disclosure quality helped narrow the information asymmetry gap. The analysis of ratios and derived indicators shows that changes in the structure of assets, deposits, investments, and the financing portfolio increase the need for qualitative disclosure that explains the reported figures. The study also notes that nominal values expressed in Syrian pounds are insufficient, on their own, to infer real growth because of changes in the currency’s value. It concludes that accounting disclosure quality represents a key interpretive channel through which compliance with presentation and disclosure requirements contributes to reducing accounting information asymmetry in Islamic banks