In recent years, financial reporting practices in nonprofit organizations have undergone significant changes, driven by global demands for increased transparency and institutional accountability [1]. International accounting standards, such as IFRS for Non-Profit Organizations (NPOs), have reinforced the urgency of implementing accrual-based reporting and comprehensive disclosure, including in the religious sector. Although Indonesia has not yet fully adopted IFRS for NPOs, the adoption of Interpretations to Financial Accounting Standards (ISAK) 35 is a strategic step to address the need for harmonization with international practices and fill gaps in the financial reporting of nonprofit entities at the national level. Financial reports prepared based on structured accounting standards can increase donor confidence and enhance organizational management efficiency [2].

The development of Islamic financial management in Indonesia has progressed significantly in the last decade, marked by increasing public attention to the principles of accountability and transparency, including in religious-based organizations such as mosques. Mosques, as nonprofit entities, are not only places of worship but also centers of social, educational, and economic activities. Therefore, accountable and transparent fund management is crucial for maintaining the trust of congregations, donors, and the community [3].

The principles of accountability and transparency in managing community funds can also be strengthened through an ethical approach to research. In line with this, the textbook "Islamic Economic Research Methodology" [4] emphasizes that every stage of the research process, from problem formulation and data collection to analysis and report preparation, should be based on sincere intentions, trustworthiness, and upholding academic ethics. This approach aligns with Islamic values, which place accountability not merely as administrative responsibility but also as a form of moral and spiritual responsibility. By integrating Sharia ethics into the process of preparing financial reports and mosque governance, it is hoped that transparency practices can be implemented more consistently and sustainably, not only to meet standards such as ISAK 35, but also to maintain congregational trust and ensure the blessings of community fund management.

Several mosques in Indonesia have begun gradually adopting the principles of financial transparency, although they have not yet fully implemented accounting reporting standards for non-profit entities. A study conducted at the Jami' Al-Umary Mosque in Kelayu, West Nusa Tenggara (NTB), showed that financial records are still kept manually, limited to cash inflows and outflows. However, financial reports are announced periodically every Friday and disseminated through social media and the mosque's bulletin board. This practice represents a relatively good form of transparency, although it does not fully comply with ISAK 35 provisions regarding the presentation of the statement of financial position, changes in net assets, and notes to the financial statements [5].

In practice, most mosques in Indonesia still do not have a financial reporting system that complies with accounting standards, and in fact, many mosques still prepare simple financial reports, only recording income and expenses without adequate information grouping and disclosure [6]. In Indonesia, the previous relevant standard was PSAK 45, which was later revoked and replaced by ISAK 35 concerning the Presentation of Financial Statements of Non-Profit Entities. ISAK 35 became effective on January 1, 2020, and serves as a new guideline for preparing financial reports that are more comprehensive, relevant, and reflect the economic substance of the activities of non-profit entities [7]. ISAK 35 prepares financial reports that reflect transparency and responsibility for congregational funds. This standard regulates the presentation of statements of financial position, activity reports, and cash flow statements based on accrual accounting principles, although its application is often overlooked in mosque financial management practices [8]. The role of human resource competency, internal control systems, technology integration, stakeholder participation, and adherence to financial management standards are significant determinants. Organizational commitment also strengthens the influence of human resources and internal controls on these outcomes. This demonstrates the importance of human resource training and sound control systems to prevent misappropriation of funds and strengthen public trust [9]. The importance of implementing technology in financial reporting is highlighted. They suggest the need for an online recording system and real-time financial reporting as a means to increase efficiency and transparency, particularly in the management of waqf and infaq funds. This research indicates that adopting technology is a strategic solution for mosques facing administrative limitations but wishing to uphold the values of transparency.

The Al-Mashun Grand Mosque and the Medan Grand Mosque are two large and historic mosques in Medan City that receive significant public funding, including infaq, alms, waqf, and institutional and individual grants [10]. Based on observations and interviews, it was discovered that financial management at the two mosques did not fully comply with the accounting principles for non-profit organizations stipulated in ISAK 35. Financial reports were still prepared manually and simply, consisting of cash receipts and disbursements without account classifications, activity reports, and complete balance sheets. Periodic financial audits were also conducted only at the Medan Grand Mosque, while the Al-Mashun Grand Mosque had never been audited by an independent auditor. Auditor attributes play a significant role in improving audit quality and stakeholder trust [11].

Several studies have shown that accounting practices in mosques are often influenced by local spiritual and cultural values, resulting in a lack of standardization in administrative and financial reporting. Previous studies, such as those by [12] and [13], have examined the financial transparency aspect of mosques, but have not explicitly linked it to the implementation of ISAK 35. Furthermore, the approaches used were largely descriptive, without conducting an in-depth analysis of specific elements of accounting standards.

Open reporting practices were also found at the Al-Akbar National Mosque. According to [14], this mosque has implemented a reporting system based on PSAK 35 and regularly submits financial reports to the public through print and online media. Although not yet fully audited by an independent auditor, this approach demonstrates a commitment to transparency and accountability in the management of congregational funds. Financial reporting is not merely intended for administrative purposes but also serves as a crucial instrument in maintaining the credibility of the mosque institution in the eyes of the congregation and the wider public.

Another study by [15], emphasized the importance of spiritual values in shaping mosque financial governance. By prioritizing the principles of amanah (trustworthiness) and fathanah (trustworthiness), mosques can establish a reporting system that not only complies with accounting standards but also aligns with the Islamic values underlying the institution's existence. This research suggests that the implementation of ISAK 35 should not be viewed merely as a technical obligation but also as a manifestation of ethical values in the management of religious-based public funds.

Research conducted by [16] in a journal entitled "Analisis Penerapan Penyusunan Laporan Keuangan Masjid Baitul Makmur Situbondo Berdasarkan ISAK No.35", generally still focuses on the technical aspects of preparing mosque financial reports based on I ISAK 35, using a single case study approach and oriented towards reconstructing reports based on the accounting cycle.

However, previous research still has several limitations. Most previous studies focused solely on the technical aspects of preparing financial reports based on ISAK 35 normatively, without further examining the implications of its implementation for improving the quality of organizational governance, particularly in the context of strategic transparency and accountability.

The Al-Mashun Grand Mosque, a mosque of the Deli Sultanate managed by the mosque's caretaker, has a simpler and unaudited reporting system, while the Medan Grand Mosque is required to prepare periodic financial reports and has undergone an audit. This indicates a gap in the literature regarding the actual impact of ISAK 35 implementation in diverse governance situations. Therefore, this study aims to fill this gap by examining in-depth how ISAK 35 implementation plays a role in improving the transparency and accountability of mosque financial reports based on different management systems.

Although various previous studies have discussed the financial transparency of mosques and the importance of implementing non-profit accounting standards such as ISAK 35, most of these studies are normative in nature and focus on the technical aspects of financial reporting. These previous studies tend to use a descriptive approach and single case studies, without delving deeper into the application of ISAK 35 to improve the overall quality of organizational governance, particularly in terms of strategic accountability and public transparency. Furthermore, few studies have compared financial reporting practices in mosques with different management systems and have not positioned ISAK 35 within the framework of Sharia ethical values and the complex governance context of religious institutions.

Therefore, this study is novel in two main aspects: first, by exploring the role of ISAK 35 not only as a technical guide but also as a strategic instrument in increasing transparency and accountability in the management of religious-based public funds; second, by comparing the management models of two large mosques in Medan City the Al-Mashun Grand Mosque and the Medan Grand Mosque which have different institutional characteristics, thus enabling the exploration of factors determining the successful implementation of this accounting standard. This research is expected to provide theoretical contributions to the non-profit public sector accounting literature and offer practical recommendations based on sharia values for more professional and integrity-based mosque financial governance.

The purpose of this study is to analyze in-depth the application of ISAK 35 in the preparation and presentation of financial reports at two large mosques in Medan City, namely the Al-Mashun Grand Mosque and the Medan Grand Mosque, and to evaluate its contribution to improving the financial accountability and transparency of religious-based nonprofit organizations. This study focuses not only on normative compliance with accounting standards but also aims to assess the impact of ISAK 35 implementation on the effectiveness of mosque financial governance through a qualitative approach and the Champions method. By comparing two different management models, this study is expected to provide conceptual contributions to the development of nonprofit public sector accounting literature and offer practical recommendations for mosque administrators in managing public funds professionally, transparently, and responsibly in accordance with Sharia principles and applicable financial standards.

This phenomenon indicates that the larger and more complex the management of funds and their accountability to various parties, the greater the need to adopt rigorous accounting standards to ensure optimal transparency and accountability.

This research uses a qualitative approach with a case study method. The aim is to understand in-depth how the implementation of ISAK 35 can improve transparency and accountability in financial reporting at two mosques with different management systems: the Al-Mashun Grand Mosque and the Medan Grand Mosque. The qualitative approach was deemed most appropriate because it allows for a comprehensive exploration of social and organizational phenomena, particularly in the context of the non-uniform financial reporting of non-profit entities. Case studies were used because they illustrate the differences in the application of non-profit accounting standards in two contrasting yet relevant real-world situations [17].

The selection of these two mosques was conducted through purposive sampling, taking into account structural variations and funding sources: the Al-Mashun Grand Mosque is historically influenced by the Deli Sultanate and is managed traditionally, while the Medan Grand Mosque is managed with financial support from the local government and has a more formal governance structure. These two mosques are located in Medan, a center of religious activity with various mosque management models, thus representing the complexity and dynamics of mosque financial reporting more broadly.

Research subjects included the mosque's core management (treasurer, head of the mosque welfare board, secretary), active congregants, and internal auditors (specifically for the Medan Grand Mosque). Data collection techniques included in-depth interviews, participant observation, and documentation. The interview instrument was developed based on indicators in ISAK 35, aligned with the assessment dimensions of Dean J. Champion's method. To ensure data authenticity, triangulation validation of sources and techniques, as well as member checking with key informants, ensured the validity of the findings. Peer debriefing was also conducted with fellow researchers to obtain critical input on data interpretation.

Data analysis used the Miles and Huberman interactive model consisting of three stages: (1) data reduction through selection of relevant information, (2) data presentation in the form of tables and systematic descriptive narratives, and (3) conclusions and verification by synthesizing the results of interviews, observations, and documentation. To measure the level of compliance with the implementation of ISAK 35, a simple quantification method was used with a comparative checklist based on the following formulation by Dean J. Champion:Dean J. Champion's Formula:

This study aims to analyze the application of ISAK 35 in improving accountability and transparency in financial reporting in non-profit religious organizations, through a comparative case study of the Al-Mashun Grand Mosque (managed by the Deli Sultanate) and the Medan Grand Mosque (part of whose infrastructure funds are managed by the local government). The analysis was conducted using a qualitative approach using a checklist based on indicators in the five main components of financial reporting according to ISAK 35, as well as the Champions method analysis technique.

The results of the checklist data processing indicate significant differences in the level of implementation of ISAK 35 at the two mosques. Based on calculations of 20 reporting indicators developed from the five main elements of ISAK 35, the following results were obtained:

The Medan Grand Mosque demonstrated a near-perfect level of ISAK 35 implementation, with 19 of the 20 evaluated indicators met, including the statement of financial position, activity report, statement of changes in net assets, statement of cash flows, and notes to the financial statements. This is reinforced by digital financial reporting documentation, open disclosure to the congregation, and the existence of an independent audit system with an unqualified opinion (WTP) from an external auditor. In contrast, the Al-Mashun Grand Mosque only met 13 of the 20 indicators (65%). Its financial statements are still prepared manually and only include activity and cash flow reports, while the statement of financial position, changes in net assets, and notes to the financial statements have not been systematically prepared. This indicates gaps in the implementation of ISAK 35, impacting the quality of financial transparency and accountability at both mosques.

Furthermore, the findings of this study further reinforce the urgency of implementing ISAK 35 in the financial governance of faith-based non-profit organizations. The Medan Grand Mosque, which achieved an implementation score of 95%, can be considered an example of best practice in mosque financial reporting in Indonesia. The high level of compliance with the five main elements of ISAK 35 demonstrates that the management of community funds is not merely administrative but has also entered the realm of professionalism and good governance. This is reinforced by an independent audit system, accrual-based reporting, and public disclosure of financial information, all of which foster trust among congregations and donors.

This phenomenon applies not only to the local context but also aligns with global trends regarding the governance of nonprofit organizations. According to [16], charitable and religious organizations in various developed countries, such as the United Kingdom and the United States, are beginning to adopt outcomes-based reporting to demonstrate the social impact of fund use, rather than simply listing revenue and expenditure figures. Reporting based on modern accounting principles is also believed to connect organizational activities with tangible outcomes felt by the community, thus creating a virtuous circle of transparency, trust, and public participation.

This finding also aligns with the principles of Accounting Standards Codification (ASC) 958, adopted in the United States by the FASB, which emphasizes the need for detailed reporting of activities and changes in net assets. This reflects ISAK 35's alignment with international practices and significant potential for widespread adoption in Indonesia, particularly by religious entities managing public funds.

In the context of the Al-Mashun Grand Mosque, which only meets 65% of the ISAK 35 criteria, limitations in reporting infrastructure, the quality of financial management personnel, and a lack of regulatory support from religious or government authorities are evident. Despite being a historic mosque and a cultural and religious symbol of the Deli Sultanate, the reporting system remains manual, not yet integrated with accrual accounting principles, and has never been independently audited, indicating a lack of institutional awareness of the importance of financial transparency.

Upon further analysis, the differences in implementation between the two mosques are not merely technical issues, but reflect gaps in organizational culture, leadership commitment, and access to institutional support. Nonprofit organizations with strong leadership and internal accountability mechanisms tend to be better able to prepare credible financial reports, even without external pressure. In other words, accountability is shaped not only by rules but also by the organization's internal values and commitments [18].

Furthermore, data-driven approaches such as the checklist method and the Champions classification also make important contributions to objectively measuring the implementation of standards. With measurable indicators, evaluation of reporting performance is no longer subjective or merely narrative, but can be quantitatively confirmed. This opens up opportunities for the development of benchmarking tools that can be widely used by mosques in Indonesia to measure compliance with ISAK 35.

This research also responds to the findings of [19], who emphasized the importance of financial reports as a strategic communication instrument, not simply a tool for administrative accountability. In the context of mosques, financial reports prepared according to standards will strengthen the legitimacy of the management in the eyes of the congregation and the public, and facilitate collaboration with donor agencies, corporate social responsibility (CSR) programs, or zakat and waqf institutions.

The discussion of this research also strengthens the limited domestic literature. As noted by [20], the level of accountability of mosques in Indonesia varies widely, depending on factors such as organizational structure, technological support, the education level of the management, and local cultural influences. In this regard, the Medan Grand Mosque represents an institution that has begun to adopt modern practices, while the Al-Mashun Grand Mosque is still in the early stages of transformation.

It is important to note that the success of the Medan Grand Mosque did not occur overnight, but rather through a process of adaptation, training, and support from local government policies that position financial reporting as part of the governance reform of houses of worship. This provides an important lesson: regulatory policies that encourage the implementation of accounting reporting standards in mosques, whether through training, mentoring, or incentives, can be a strategic step in strengthening the financial system of the congregation.

These results confirm the initial hypothesis that the higher the level of ISAK 35 standard implementation, the higher the quality of accountability and transparency in mosque financial management. ISAK 35 is designed to improve the presentation of financial information in non-profit entities to make it more relevant, comparable, and reliable [21].

Substantively, the independent variable in this study is the level of ISAK 35 implementation (which covers five reporting elements), while the dependent variable is the quality of financial accountability and transparency. This relationship is clearly evident in the research context: the Medan Grand Mosque, which prepares a complete report in accordance with ISAK 35, demonstrates a high level of accountability, demonstrated by the existence of independent audits, regular reporting, and disclosure of information to the congregation. In contrast, the Al-Mashun Grand Mosque has not achieved transparent governance because it has not prepared a complete statement of financial position and notes to the financial statements, and has never been independently audited. The fact that the two mosques operate in different structural contexts one jointly managed by the local government and the other independently managed by the Deli Sultanate strengthens the finding that organizational culture and institutional support significantly influence the implementation of reporting standards.

These research results align with the findings of [22] stated that non-profit organizations that comprehensively implement ISAK 35 tend to have more accountable financial reports and gain greater public trust. However, this contrasts with studies by [14] and [12], which found that most small mosques in Indonesia are still unable to prepare reports based on ISAK 35 due to limited human resources and reporting infrastructure. This finding fills a gap in the literature by demonstrating that differences in organizational structure, technological support, and access to external audits influence the extent to which reporting standards can be implemented.

The 30% difference in scores between the two mosques is not explained simply by the term "significant difference," but is analyzed based on the results of the indicator tabulation. The Medan Grand Mosque completes all five reporting elements (5 out of 5 components met), while the Al-Mashun Grand Mosque has not systematically compiled 3 out of 5 essential components. For example, not absence of reports on changes in net assets and notes to the financial statements was the primary factor contributing to the low score. This data indicates that the completeness of report elements is a key determinant of accountability quality, not simply the intention to prepare financial reports in general.

Given the research findings and the challenges of implementing ISAK 35 in both mosques, it is crucial to design sustainable strategies to ensure more professional and transparent financial governance. One strategic approach going forward is to integrate ISAK 35 principles with the development of mosque-based Islamic cooperative business units. Cooperatives can be instruments for the economic empowerment of congregations, managed according to the principles of accountability and financial transparency. In line with this, [23]recommend five implementation strategies: first, operational digitization, namely implementing an app-based cooperative accounting and lending system to support reporting accuracy and congregational data transparency; second, strengthening human resources through formal training for mosque cooperative administrators in Islamic accounting, cooperative management, and entrepreneurship; third, synergistic partnerships with zakat institutions, Islamic banks, and local BMTs to expand access to capital and technical guidance; Fourth, community-based promotion through da'wah approaches and religious study groups as a medium for financial outreach and literacy for the congregation; and fifth, ongoing monitoring and evaluation by developing cooperative performance indicators (Key Performance Indicators (KPIs) that are regularly monitored by the internal audit team and mosque administrators. This strategy is expected to strengthen financial accountability and transparency while simultaneously establishing a model for an economically independent mosque based on sharia principles.

To clarify the findings, the discussion is organized into three main themes: (a) Accountability, (b) Transparency, and (c) Factors Supporting or Inhibiting the Implementation of ISAK 35.

Accountability

The Grand Mosque of Medan demonstrates a near-perfect level of ISAK 35 implementation (95%), as evidenced by the fulfillment of 19 of the 20 key indicators. This reflects a strong commitment to public accountability, demonstrated by the existence of an independent audit system with an Unqualified Opinion (WTP), accrual-based financial reporting, and regular submission of reports. Meanwhile, the Al-Mashun Grand Mosque only meets 13 of the 20 indicators (65%), with its financial reports being prepared manually and not covering all the components required by ISAK 35.

This analysis confirms a positive relationship between the level of ISAK 35 implementation and the quality of financial management accountability. Mosques that adopt modern reporting principles will gain greater trust from their congregations and donors, and will be more likely to establish strategic partnerships with zakat institutions, CSR organizations, and BMTs.

Transparency

The high score of the Medan Grand Mosque also demonstrates its success in transparency, particularly due to its digital reporting practices, openness of information to the congregation, and the provision of easily accessible financial reports. Conversely, limited infrastructure and the lack of an external audit system have left the Al-Mashun Grand Mosque lagging behind in terms of public transparency.

In a global context, the practice of outcomes-based reporting in developed countries reinforces the urgency of transparency as a strategic, not merely administrative, instrument. These findings demonstrate that ISAK 35 aligns with international trends such as ASC 958 (US) and Charities SORP (UK), and therefore warrants wider adoption in Indonesia.

Supporting and Inhibiting Factors

The striking differences between the two mosques stem not only from technical aspects but also from organizational structure and institutional support. The Medan Grand Mosque, jointly managed by the local government, has access to training, digital technology, and regulatory oversight, while the Al-Mashun Grand Mosque remains traditionally managed by the Deli Sultanate family foundation.

Implementation limitations at Al-Mashun can be analyzed using the Institutional Isomorphism theory, which explains how organizations tend to change in response to institutional pressures (regulative, normative, and mimetic). The absence of strong external pressures for example, government regulations or public expectations leads to low motivation for transformation. Furthermore, Resource Dependency Theory is also relevant; because Al-Mashun does not rely on public funding or external institutions, the incentive to improve accountability is also low.

This research indicates the need for active involvement by the Ministry of Religious Affairs in fostering mosque financial management through:

1. Mandatory ISAK 35-based financial reporting regulations for large mosques.

2. Providing training in non-profit accounting and internal auditing for mosque administrators.

3. Developing a national digital reporting system for accrual-based mosques.

4. Incentives in the form of grants for mosques that comply with transparent financial reporting.

To strengthen the visualization of the results, a bar chart has been constructed (Figure 1) to compare the percentage of ISAK 35 component compliance between the two mosques. In addition, it is recommended to include excerpts from actual financial statements before and after the implementation of ISAK 35 for example, a comparison of the format of the statement of financial position so that readers can concretely see the differences in structure and information presented.

The results of this study confirm that the implementation of ISAK 35 not only improves the quality of financial reports but also strengthens social legitimacy and public trust in religious institutions. Future implementation strategies need to include a systemic approach regulation, accounting literacy, and technological support so that this standard can become the new norm in mosque financial management in Indonesia.

This study successfully demonstrates that the implementation of ISAK 35 significantly contributes to improving the accountability and transparency of financial reporting in religious-based nonprofit organizations. The comparative case analysis of the Al-Mashun Grand Mosque and the Medan Grand Mosque reveals a strong correlation between the completeness of ISAK 35 reporting components and the quality of financial governance. The Medan Grand Mosque, with a 95% compliance rate, exemplifies best practices supported by digital systems, independent audits, and structured financial disclosure. In contrast, the Al-Mashun Grand Mosque, with only 65% compliance, reflects limitations in institutional support, technological infrastructure, and regulatory engagement.

These findings highlight that the implementation of ISAK 35 is not merely a technical requirement but a strategic effort towards professionalization and public trust-building. The differences between the two mosques illustrate the influence of organizational structure, leadership commitment, and institutional dependency, which are in line with Institutional Isomorphism and Resource Dependency Theory.

Therefore, wider adoption of ISAK 35 in mosque financial governance requires not only standard-setting but also policy support from the Ministry of Religious Affairs, including mandatory regulations, training programs, digital reporting platforms, and performance-based incentives. Future implementation strategies should integrate Sharia ethical values, technological innovation, and public sector accountability standards to ensure sustainable, transparent, and trustworthy financial management in religious institutions.

The author would like to thank the administrators of the Al-Mashun Grand Mosque and the Grand Mosque of Medan for their cooperation and openness in the data collection process. I also express my gratitude to my family, partner, and friends for their continued support and understanding.