Sharia Governance Climate, Psychological Safety, and AuditorDiscretionary Disclosure Behavior

Novi Yanti; Syamsurizal; Gehad Mohammed Sultan Saif

doi:10.69725/jebi.v2i4.339

Authors

Novi Yanti Study Program of Sharia Banking, Institut Agama Islam Sumatera Barat, Pariaman, West Sumatra, Indonesia, 25522
Syamsurizal Study Program of Sharia Banking, Institut Agama Islam Sumatera Barat, Pariaman, West Sumatra, Indonesia, 25522
Gehad Saif Master in Accounting Education, MBA Finance, Bachelor of science with honors in Accounting, University of Aden, Aden, Yemen

DOI:

https://doi.org/10.69725/jebi.v2i4.339

Keywords:

Sharia governance, Psychological safety, Auditor disclosure, Ethical climate, Management dominance

Abstract

Purpose — This study examines how oversight leadership openness, management dominance pressure, governance transparency climate, and auditor moral courage influence auditor discretionary disclosure behavior within Sharia-governed financial institutions.

Design/methodology/approach — Drawing on psychological safety theory, accountability and authority perspectives, and ethical leadership theory integrated with Islamic governance principles, this research employs a quantitative approach using survey data from governance and audit professionals in two emerging Islamic financial contexts.

Findings — The findings indicate that leadership openness, transparency climate, and moral courage positively enhance discretionary disclosure, whereas management dominance pressure suppresses it. Crucially, psychological safety emerges as a central explanatory mechanism that translates governance conditions into disclosure behavior. The moderating role of Sharia governance ethical climate appears limited, suggesting that ethical norms function more as foundational governance values rather than as interactional amplifiers in this specific behavioral context.

Originality/value — This study contributes to governance and auditing literature by integrating relational safety mechanisms with Sharia-based oversight principles. It offers a novel perspective by identifying psychological safety as the primary conduit through which governance structures and individual ethical capacities shape disclosure behavior, moving beyond purely structural or compliance-based views of Sharia auditing.

Implications — The results offer practical implications for strengthening transparency, accountability, and ethical reporting in Islamic financial institutions. They suggest that to improve disclosure, organizations must prioritize cultivating a psychologically safe environment and reducing management dominance, rather than relying solely on formal ethical codes or structural compliance.

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Author Biographies

Novi Yanti, Study Program of Sharia Banking, Institut Agama Islam Sumatera Barat, Pariaman, West Sumatra, Indonesia, 25522

Dr. Novi Yanti, S.E., MM is a lecturer at the Department of Islamic Banking, Institut Agama Islam Sumatera Barat, Pariaman, Indonesia. She holds a doctoral degree, a Master of Management, and a Bachelor of Economics, with specialization in finance and Islamic banking. Her research interests include Islamic banking, Sharia governance, and organizational behavior.
Syamsurizal, Study Program of Sharia Banking, Institut Agama Islam Sumatera Barat, Pariaman, West Sumatra, Indonesia, 25522

Syamsurizal, S.E., MM is a faculty member in the Department of Islamic Banking at Institut Agama Islam Sumatera Barat, Pariaman, Indonesia. He earned his Master of Management and Bachelor of Economics degrees, focusing on financial management and Islamic financial institutions. His scholarly work explores Islamic banking, corporate governance, and management practices.
Gehad Saif, Master in Accounting Education, MBA Finance, Bachelor of science with honors in Accounting, University of Aden, Aden, Yemen

Gehad Mohammed Sultan Saif is a researcher in accounting and finance. He holds a Master in Accounting, an MBA in finance, and a bachelor of science with honors in accounting from the University of Aden, Yemen. His research focuses on accounting, corporate governance, and Islamic finance, with publications in reputable international journals. His academic profiles are available on ORCID, Scopus, Web of Science, and Google Scholar.

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