Risk Based Internal Shariah Audit Practices in the Islamic Bank

Nurulhuda Abd Rahman*, Nor’azam Mastuki, Nawal Kasim and Muhamad Rahimi Osman
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Nurulhuda Abd Rahman*: Faculty of Accountancy, Universiti Teknologi MARA, Malaysia
Nor’azam Mastuki: Arshad Ayub Graduate Business School, Universiti Teknologi MARA, Malaysia
Nawal Kasim: Faculty of Accountancy, Universiti Teknologi MARA, Malaysia
Muhamad Rahimi Osman: Academy of Contemporary Islamic Studies Universiti Teknologi MARA, Malaysia

The Journal of Social Sciences Research, 2018, 954-961 Special Issue: 5

Abstract: Shariah audit is an essential key function to ensure Shariah compliance in Islamic banking institutions. Shariah audit complements existing functions of conventional internal audit, which is lacking in providing adequate assurance on Shariah compliance. Hence, there is a need to incorporate Shariah audit function to existing corporate governance framework of Islamic banks (IB). However, there is not much guidance that auditors could refer to in order to perform comprehensive Shariah audit procedure. The current study intends to provide in-depth explanation on the process of internal Shariah audit, particularly on the planning, execution and reporting, also follow up phases. If focuses on the application of risk-based internal audit (RBIA) approach in the practices. The study adopts a qualitative approach of single case study in an attempt to achieve its objectives. By providing detailed explanation on practices of internal Shariah audit in Islamic banks, findings are expected to contribute in supplying valuable in-depth information for Islamic banks, as well as other Islamic institutions. This information is especially important for in strategizing internal Shariah audit practices as an important control and monitoring strategy in their business operation.

Keywords: Shariah audit; Shariah compliance; Islamic banking (search for similar items in EconPapers)
Date: 2018
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