The Impact of External Shari&amp;#39;ah Auditing on the Efficiency of Jordanian Islamic Banks Performance

Samara, Mohammad Falah Al; Ali, Osama Abdulmunin Al; Afeef, Jamal Hassan Al

doi:10.5539/ijbm.v14n5p183

Cited by 5 publications

References 11 publications

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External Sharī‘ah audit and review committee Vis‐a‐Vis Sharī‘ah compliance quality and accountability: A case of Islamic banks in Bangladesh

Alam

Ahmad

Muneeza

2020

Journal of Public Affairs

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External Sharī‘ah Audit (ESA) is a control mechanism meant for formulating an objective view by an independent Sharī‘ah audit team about the obligation of Islamic banks' (IBs) management, personnel and other divisions towards Sharī‘ah compliance. This study principally aims to examine the relevancy of ESA and review committee in enhancing the level of Sharī‘ah compliance quality and accountability of IBs in Bangladesh. The study examines data from 17 respondents obtained via semi‐structured interviews and secondary sources in library. This study establishes that Sharī‘ah officers of IBs in Bangladesh are unable to perform audit functions properly which indicates the limitations of current Sharī‘ah audit functions. The study discovers the need for an independent ESA for proper auditing of IBs' operations in Bangladesh with a view to Sharī‘ah compliance. Thus, an ESA and review committee is imperative to enhance the quality of Sharī‘ah compliance and ensure accountability of all divisions within IBs. This audit is to be provided either by Bangladesh Bank (BB), the central bank of the country or a third party such as Islamic chartered accountants' firms or Sharī‘ah audit firms. The study would contribute to existing literature on the importance of ESA and its conditions in Bangladesh. The study also provides some instructions for global Islamic banking practice on the issues examined. The study contributes to agency, stakeholder and legitimacy theory via highlighting the inability of Sharī‘ah auditors to perform their function independently and efficiently.

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External Sharī‘ah audit and review committee Vis‐a‐Vis Sharī‘ah compliance quality and accountability: A case of Islamic banks in Bangladesh

Alam

Ahmad

Muneeza

2020

Journal of Public Affairs

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Shariah Governance and Audit in the Islamic Banks: A Literature Review

Saleh,

Alsirhani,

Muayyad

2023

Studies in Systems, Decision and Control

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The implementation of Shariah governance by the Shariah Supervisory Board (SSB) is critical to overseeing and directing the IB's activities and ensuring their integrity, credibility, and transparency. Islamic banks will not be able to operate in accordance with Shariah if they do not follow proper Shariah governance processes. The purpose of this study is to investigate the Sharia governance practices of Islamic banks. Moreover, over 30 years ago, as the Islamic financial industry developed, Shariah testing became an issue. However, it is difficult to obtain reports describing the current state of Shariah research. Therefore, it is important to evaluate studies on Shariah testing. Therefore, the aim of this study was to assess and present the current state of Sharia auditing using an inductive approach. In addition, we analyze relevant previous literature to evaluate and evaluate Shariah governance and auditing in Islamic banking. The findings of this study show that Islamic law auditing and governance have a significant impact on the performance of Islamic banks.

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Shariah audit of Islamic Banks in Bangladesh: the present practice and the way forward

Alam

Ahmad

Ahmed

et al. 2023

JAAR

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PurposeThe study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the relevant areas.Design/methodology/approachThis research applied a qualitative method, and data were collected through conducting semi-structured interviews in Bangladesh. A total of 17 interviews were conducted for accomplishing the research objectives.FindingsThe study finds that there is no comprehensive Shariah audit manual in the current operation for IBs in Bangladesh, and as such, the requirements of their Shariah compliance remain a big question. Although the Shariah audit is conducted within IBs, and the Shariah audit officers or Shariah officers inspect necessary documents while conducting the Shariah audit, they only cover 10–20% of total investments and transactions. Based on the findings of this study, it is recommended that the Shariah auditing tasks should broadly cover at least 80% of the investment portfolios, documents and financial contracts and activities.Research limitations/implicationsThe findings of this research are expected to significantly contribute to the regulatory authorities concerned in Bangladesh and beyond, which include the suggestions that IBs can adopt to strengthen their Shariah governance system. The study also pinpoints that in the current system, Shariah auditors' roles are somehow limited in examining and checking the investment sides with a minimal portion (10–20%), for which they are unable to perform their responsibilities in a befitting manner to provide assurance services and overall Shariah compliance of IBs activities.Practical implicationsThis study explores the current Shariah audit systems and provides recommendations to improve the existing systems which will be beneficial for Islamic banks of Bangladesh.Originality/valueTo the researchers' knowledge, perhaps this is the first research of its kind which seeks to explore the current Shariah audit practice in Bangladesh qualitatively, and it provides some practical suggestions for making the necessary developments of the current audit process of IBs. In addition, there are no empirical studies in the entire Emerald insight publishers and Scopus database regarding Shariah audit practices. The study contributes to the agency, stakeholder and legitimacy theories by exploring the Shariah audit of IBs.

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The Impact of External Shari'ah Auditing on the Efficiency of Jordanian Islamic Banks Performance

Cited by 5 publications

References 11 publications

External Sharī‘ah audit and review committee Vis‐a‐Vis Sharī‘ah compliance quality and accountability: A case of Islamic banks in Bangladesh

External Sharī‘ah audit and review committee Vis‐a‐Vis Sharī‘ah compliance quality and accountability: A case of Islamic banks in Bangladesh

Shariah Governance and Audit in the Islamic Banks: A Literature Review

Shariah audit of Islamic Banks in Bangladesh: the present practice and the way forward

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