A CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING OF WAKALAH ZAKAT IN MALAYSIA
DOI:
https://doi.org/10.35631/AIJBES.829053Keywords:
Accountability, Financial Reporting, Islamic Accounting Standards, Wakalah Zakat, Zakat InstitutionsAbstract
Purpose: This paper plan to develop an implementation-oriented framework for financial reporting of wakalah zakat in Malaysia. Although the Islamic Accounting Standards for Baitulmal, Zakat and Wakaf (PPIBZW) provide the primary local reporting basis, delegated distribution creates a timing and accountability problem because transfer to an agent can precede verified distribution to eligible asnaf. Methodology: Using an integrative literature review and theory-development approach, the paper synthesises PPIBZW with AAOIFI and IPSAS as comparative references and links the wakalah transaction cycle to Islamic accountability, agency, stakeholder and legitimacy theories. Findings: The framework organises reporting around six mechanisms: principal-agent classification; completion-based recognition; measurement and reconciliation; fund segregation and presentation; wakalah-specific disclosure; and governance supported by Shariah assurance and digital traceability. These mechanisms are expected to strengthen information quality and make unresolved balances and responsibilities more visible. Originality/value: The paper introduces stewardship-fulfilment visibility, defined as the ability to trace a wakalah amount from approval and transfer through verified distribution, deferral, return or exception using reconcilable evidence. The construct provides a testable bridge between transaction-level reporting design and accountability outcomes and offers a basis for disclosure indices, implementation guidance and empirical validation.
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