The Role of Internal Audit to Reduce the Effects of Creative Accounting on the Reliability of Financial Statements in the Jordanian Islamic Banks

Baker Akram Falah Jarah, Mufleh Amin AL Jarrah, Murad Ali Ahmad Al-Zaqeba and Mefleh Faisal Mefleh Al-Jarrah
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Baker Akram Falah Jarah: Faculty of Business, Amman Arab University, Amman 11953, Jordan
Mufleh Amin AL Jarrah: Faculty of Business, Amman Arab University, Amman 11953, Jordan
Murad Ali Ahmad Al-Zaqeba: Faculty of Business, Amman Arab University, Amman 11953, Jordan
Mefleh Faisal Mefleh Al-Jarrah: Islamic Economics and Banking Department, Faculty of Shari and Islamic Studies, Yarmouk University, Irbid 21163, Jordan

IJFS, 2022, vol. 10, issue 3, 1-16

Abstract: The purpose of this study is to look into the role of internal audit (IA) in reducing the effects of creative accounting (CA) on financial statement reliability in Jordanian Islamic Banks. The research study used the survey methodology to examine the role of internal audit (including independence and objectivity, verifiability, professional care, and neutrality) to reduce the effects of CA on the reliability of financial statements in Jordanian Islamic Banks. The population consists of all practicing auditors in Jordanian Islamic Banks, with a sample of 100 practicing auditors chosen from the total population of 143 auditors using a simple random selection approach. The questionnaire was distributed to the internal auditors working in these banks. Moreover, the primary data were analyzed using the partial least squares (3.3.3) software. The results showed that there was a role for IA (including independence objectivity, verifiability, professional care, and impartiality) in limiting the effects of CA on the reliability of financial statements in Jordanian Islamic Banks.

Keywords: internal audit; creative accounting; including independence and objectivity; verifiability; professional care; neutrality; Jordanian Islamic banks (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2022
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