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Risk Based Internal Shariah Audit Practices in the Islamic Bank

Author

Listed:
  • 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)

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.

Suggested Citation

  • Nurulhuda Abd Rahman* & Nor’azam Mastuki & Nawal Kasim & Muhamad Rahimi Osman, 2018. "Risk Based Internal Shariah Audit Practices in the Islamic Bank," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 954-961:5.
    • Handle: RePEc:arp:tjssrr:2018:p:954-961
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    References listed on IDEAS

    as
    1. Nuno Castanheira, 2010. "Factors associated with the adoption of risk-based internal auditing," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(1), pages 79-98, February.
    2. Triyanta, Agus & Hassan, Rusni, 2011. "The Process of Shar ah Assurance in the Product Offering: Some Important Notes for Indonesian and Malaysian Islamic Banking Practice," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 18, pages 17-43.
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