1. Introduction

According to the Annual Report of the Qatar Islamic Bank, 2010, at least two-thirds of the world’s Islamic banks are located in the GCC countries and the majority of the rest are established in the South-East Asian region. As institutions which are defined by the name and spirit of Islam, Islamic banks are required to conduct their business beyond the expectations of other common businesses. Islamic banks are expected not only to perform as profitable and prudent businesses which comply with Islamic principles, but also to conduct socially responsible initiatives and fully disclose the initiatives in their annual reports.

However, studies of social responsibility disclosure by Islamic banks are still very limited. Besides, there is a perspective that researchers on Islamic social responsibility need to develop a more comprehensive framework as there are limitations in social reporting by the conventional institutions sector (Haniffa, 2002). The limitations include absence of observation on spiritual as well as moral aspects. This is because Islamic banks are expected to perform their roles beyond those of conventional banks. Islamic banks should assure themselves that they are operating ethically under guidance of Islamic principles and law. Thus, Islamic banks require a social reporting framework based on Islamic principles. These principles should have been used in developing Islamic social reporting to reach the accountability and transparency goals.

This study focuses on factors influencing Islamic social reporting by adopting Islamic social reporting determinants as suggested by Othman et al. (2009) with several adjustments. These adjustments include investigation on effects of political and civil repression, number of Muslim populations, leverage and profitability on Islamic social reporting. After all, this study is expected to be able to contribute to empirical researches exploring Islamic social reporting disclosed by Islamic banks.