Bridging Faith and Technology: Digital Transformation of MSME Financial Transparency Through Islamic Values

Isna Ayulestari, Hana Dhayan — Mon, 19 Jan 2026 00:00:00 +0000

Objective & object: This study examined the role of digital technology in enhancing financial transparency of Micro, Small, and Medium Enterprises based on Islamic values in Indonesia during 2024.

Methods: An exploratory qualitative approach was employed through semi-structured interviews with six MSME owners from various sectors. Data were collected regarding their experiences with digital financial management and Islamic principles implementation, then analyzed thematically to identify patterns and challenges.

Results & Conclusions: All respondents had adopted digital technologies ranging from basic spreadsheets to integrated applications, with sophistication levels correlating to business scale. Strong awareness of Islamic principles including honesty, trustworthiness, justice, and prohibition of usury was demonstrated, with three respondents reporting instances where they sacrificed profits to maintain compliance. Main challenges identified included limited digital literacy, high implementation costs, data security concerns, and scarcity of compliant technological solutions. Digital technology significantly enhanced financial transparency through automated recording, real-time reporting, and improved accountability.

Limitations: The study was limited to six MSMEs in Indonesia, potentially affecting generalizability across different contexts and larger sample sizes.

Implications: Findings suggest practical need for government support in developing affordable Islamic financial platforms and providing faith-based digital training. Future research should explore larger samples and specific technological solutions for Islamic compliance.

Keywords: Digital transformation, financial transparency, Islamic values, MSME, Sharia compliance

Analysis Of Potential Income Manipulation Using Beneish M-Score Model

Defel Septian, Khairunnisa, Aril Indrawan, Muhammad Irsa Suryaputra — Fri, 23 Jan 2026 00:00:00 +0000

Objective & object: This research aims to analyze the potential for earnings manipulation in insurance sector companies listed on the Indonesia Stock Exchange (IDX) using the Beneish M-Score Model. The research variables include the eight Beneish financial ratios, namely Days Sales in Receivables Index (DSRI), Gross Margin Index (GMI), Asset Quality Index (AQI), Sales Growth Index (SGI), Sales, General and Administrative Expenses Index (SGAI), Leverage Index (LVGI), dan Total Accruals to Total Assets (TATA) of annual financial reports of insurance companies.

Methods: This research uses a descriptive quantitative approach with secondary data for the period 2022–2024. Data analysis techniques were carried out by calculating the Beneish M-Score to identify indications of earnings manipulation, where an M-Score value of > –2.22 indicates potential manipulation.

Results & Conclusions: Results show that some insurance companies, such as JMAS, MREI, TUGU, ABDA, and ASRM, have M-Score values above the threshold, which indicates potential earnings manipulation. The trend in the last three years shows a general increase in M-Score values, especially in the 2023–2024 period. This research supporting the hypothesis that there are indications of earnings manipulation practices in the Indonesian insurance sector. These findings strengthen agency theory and emphasize the importance of supervision and the implementation of effective corporate governance to maintain the integrity of financial reporting.

Limitations: Beneish M-Score model relies solely on financial ratios from the company's annual reports, thus not taking into account qualitative factors such as changes in management policy, internal audit practices, or the influence of corporate governance. Non-use of cross-sector comparisons, which could help to see if similar practices occur in other industries with different regulatory and economic pressures.

Implications: This study strengthens agency theory and the literature on earnings management, particularly within the highly regulated financial sector such as insurance. The findings indicate that despite stringent regulatory oversight, earnings manipulation remains a possibility. This contributes to the development of earnings manipulation detection models in the financial services sector, especially through the quantitative analysis of the Beneish M-Score. Furthermore, it serves as a critical reminder to enhance the effectiveness of financial statement oversight and auditing.

Islamic Accounting Journal

Bridging Faith and Technology: Digital Transformation of MSME Financial Transparency Through Islamic Values

Analysis Of Potential Income Manipulation Using Beneish M-Score Model