Correspondence: Noraini Mohd Ariffin, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, P.O. Box 10, Kuala Lumpur 50728, Malaysia. E-mail: norainima@iiu.edu.my

¹is currently an Assistant Professor at Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia (IIUM), teaching and supervising undergraduates as well as postgraduates. Her research area of interest includes financial accounting, corporate governance and risk management, particularly for Islamic Financial Institutions. She is also an Associate Member of the Malaysian Institute of Accountants. Her early education was from the United Kingdom where she obtained a Bachelor of Economics with a major in accounting from the University of Aberystwyth, Wales, UK, in 1991. She then proceeded to obtain her Master in Accountancy with Distinction (MAcc) in 1995 from the University of Dundee, Scotland, UK. Then, she obtained her PhD from the University of Surrey, England, UK, in 2005.

²is Visiting Professor at the ICMA Centre in the School of Business, University of Reading, UK. Previously, he was Professor of Financial Management at the University of Surrey, UK, having been Midland Bank Professor of Financial Sector Accounting at the University of Wales, Bangor. He has been a visiting professor at various universities and business schools, including Bordeaux, Metz, ESCP-EAP and HEC in France, Frankfurt and Koblenz in Germany, and IIUM in Malaysia. After studies in philosophy, politics and economics at Oxford University, he qualified as a Chartered Accountant with Arthur Andersen in London and then moved to Price Waterhouse in Paris, where he became Partner in charge of Management Consultancy Services in France and Scandinavia. His academic career thus began after substantial experience as a practitioner, mainly in management consulting.

³is the Secretary-General of the Islamic Financial Services Board.

Received 20 November 2008; Revised 20 November 2008.

Abstract

This study attempts to ascertain the perceptions of Islamic bankers (chief financial officers and risk managers) about the nature of risks, risk measurement and risk management techniques in their banks. It covers 28 Islamic banks in 14 countries using a questionnaire survey. The results indicate that Islamic banks are mostly exposed to similar types of risks to those in conventional banks, but that there are differences in the level of the risks. The findings of the study have both theoretical and policy implications for the issue of transparency, with particular reference to risk reporting in Islamic banks.