منیژه رامشه

SUBJECT & OBJECTIVES: In the contemporary era, growing concerns over environmental degradation and the increasing importance of sustainability across economic, social, and environmental spheres have made sustainability reporting a fundamental mechanism for enhancing transparency regarding the impacts of organizational activities. Organizations are increasingly expected to disclose the environmental impacts of their operations to promote accountability, facilitate informed decision-making, and contribute to sustainable development. Despite the growing importance of this issue, the legal obligation to disclose environmental sustainability information remains a subject of ongoing scholarly and regulatory debate. Against this background, the present study analytically examines the obligation to report on sustainability from the perspective of Islamic jurisprudence, with particular emphasis on its environmental dimension. It seeks to determine whether the principles and jurisprudential foundations of Islamic law provide sufficient grounds for recognizing environmental sustainability reporting as a mandatory obligation. By analyzing relevant jurisprudential principles and legal maxims, the study aims to clarify the normative basis for mandatory environmental sustainability reporting within Islamic jurisprudence. METHOD & FINDING: Using a descriptive-analytical method, the research finds that although mandatory environmental reporting may initially seem inconsistent with certain jurisprudential principles, such as the rule of authority over one's property (taslīṭ), it is strongly supported by established doctrines. These include the principle of no harm nor reciprocating harm (lā ḍarar), the rational implication between an obligation and its prerequisites, the priority of greater interests over lesser ones, the denial of means leading to wrongdoing, the prohibition of assisting oppression, justice and equity, respect for others' property, the maxim "whoever benefits bears the burden," and the duty to avert potential harm. CONCLUSION: Accordingly, despite its development within international frameworks, sustainability reporting is substantively compatible with Islamic jurisprudential principles. Nonetheless, in light of current economic conditions, incentive-based governmental policies should be prioritized over coercive enforcement.

In the behavioral finance paradigm, investor sentiment can affect managers' behavior in financial reporting. Therefore, this study examines the relationship between investor sentiment and the likelihood of fraudulent financial reporting. Additionally, as risk disclosure may influence the relationship between investor sentiment and the likelihood of fraud, this paper investigates its moderating role. For this purpose, the data of 41 companies operating in the petroleum and petrochemical industries in Tehran Stock Exchange during the years 2013 to 2021 were used. The research models have been examined by logistic regression method. The results show that the likelihood of fraud is lower when investor sentiment is high. Furthermore, the study of the market's reaction to fraud shows that the market reaction to fraud announcements is less negative during high investor sentiment periods. In addition, the results demonstrated that risk disclosure moderates the relationship between investor sentiment and the likelihood of fraudulent financial reporting. It may be because, risk disclosure reduces the impact of investor sentiment on auditors' optimism by reducing information asymmetry between managers and investors. This leads to an increase in audit report clauses that confirm likelihood of fraudulent financial reporting.