Exploring the Impact of Profitability, Leverage, and Firm Size on Islamic Social Reporting Disclosure: A Moderation Analysis of the Sharia Supervisory Board

Abstract

Islamic Social Reporting Disclosure is a form of corporate social responsibility reporting with sharia principles that is used to disclose social responsibility not only to stakeholders, but also to the community as a benchmark for the implementation of social performance of a sharia bank. However, the condition that occurs is that the disclosure of social responsibility in sharia banking is still low. The purpose of this study is to obtain empirical evidence regarding the effect of profitability, leverage, firm size on Islamic social reporting disclosure and sharia supervisory board as a moderating variable. The population used in this study is Islamic Commercial Banks (BUS) in Indonesia from 2017 to 2021, which is 13 BUS. The sampling technique used in this study is the purposive sampling technique with panel data type and using unbalanced data, obtaining 13 BUS with 58 data analysis units. This study applies descriptive analysis methods and inferential statistical analysis through panel data regression analysis and Moderated Regression Analysis (MRA). The data is processed using Eviews 10 software. The best model used in this research is the Random Effect Model (REM). The results of this study indicate that profitability has a significant negative effect and leverage does not have a significant effect on Islamic social reporting disclosure. Firm size has a positive and significant effect on Islamic social reporting disclosure. The Sharia supervisory board is unable to strengthen the influence of leverage and firm size on Islamic social reporting disclosure. However, the Sharia supervisory board is able to strengthen the influence of profitability on Islamic social reporting disclosure.