Sharia Screening Methodology: Does Its Non-Unification Affect Its Implementation?

This paper attempts to empirically assess the possibility of applying Sharia screening criteria in the Sudanese corporate sector and investigate the possibility of extending the external Auditors’ role to include reporting on Sharia compliance of corporate activities. The hypotheses of the study revolved around identifying whether the Sudanese stakeholders accept the application of the Screening Criteria as part of the compliance methodologies to cater for companies with mixed activities, whether the Sudanese stakeholders consider available Screening Criteria as effective and robust in the control of Sharia impermissible economic activities, and whether expanding the responsibilities of external auditors to include Sharia screening compliance will increase the creditability of financial information and hence attracting more investors. The paper employs a cross-sectional survey research design and depends mainly on primary data, which is collected through a structured questionnaire. To examine the accuracy of the data and conduct the analysis a number of statistical methods including the Kaiser-Meyer-Olkin (KMO), Bartlett’s Test of Sphericity, Exploratory Factor Analysis (EFA) Confirmatory Factor Analysis (CFA), and Structural Estimation Modeling (SEM) are employed. The analysis supports the hypotheses set by the study and reveals the readiness of Sudanese stakeholders to accept applying the Sharia screening Criteria and their belief in the notion that the present screening criteria are effective in controlling Sharia impermissible economic activities and the ability of external auditors to identify and report on their customers’ compliance with screening criteria.