Evaluating the Effectiveness of Senior Management Support for Shariah Audit Function in Malaysian Islamic Financial Institutions

Nur Laili Ab Ghani*
Additional contact information
Nur Laili Ab Ghani*: UKM-Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 12, 3329-3339

Abstract: Senior management holds crucial responsibility to ensure Shariah compliance over the daily operations and business activities in Islamic financial institutions (IFIs), at all times. This underscores an urgent need to strengthen the effectiveness of senior management function in managing Shariah non-compliance risks in the business activities of IFIs as mandated by Bank Negara Malaysia (BNM) in the Shariah Governance Policy Document (SGPD). Prior studies have demonstrated that various types of IFIs exhibit different levels of Shariah governance practices. However, extensive involvement of the senior management to effectively integrate Shariah compliance across all levels has been adequately examined. The main objective of this study is to evaluate the effectiveness of senior management support for Shariah audit function in Malaysian IFIs. The study employs quantitative methodology to gather the data using survey questionnaire distributed to the Head of Shariah audit in IFIs in Malaysia. Based on the findings, majority IFIs has established effective level of senior management support for the Shariah audit function especially in Islamic banks. However, the senior management support can be enhanced in terms of its function to establish the Shariah compliance culture and to provide adequate human resource for the Shariah audit function. The outcome of this study could enhance effective senior management support to ensure robust management of Shariah non-compliance risks in IFIs. The findings also contribute to further enhance the effectiveness of Shariah governance arrangement in various IFIs and encourage rigorous implementation of the Shariah compliance risk culture at all levels.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijriss/ ... sue-12/3329-3339.pdf (application/pdf)
https://rsisinternational.org/journals/ijriss/arti ... ancial-institutions/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:8:y:2024:i:12:p:3329-3339

Access Statistics for this article

International Journal of Research and Innovation in Social Science is currently edited by Dr. Nidhi Malhan

More articles in International Journal of Research and Innovation in Social Science from International Journal of Research and Innovation in Social Science (IJRISS)
Bibliographic data for series maintained by Dr. Pawan Verma ().