Enhancing Governance, Accountability and Transparency in Islamic Financial Institutions: An Examination into Sharīcah Internal Control Audit

2013 ◽  
pp. 149-169
Author(s):  
Zurina Shafii ◽  
Supiah Salleh
Keyword(s):  
Financial Institutions ◽  
Internal Control ◽  
Islamic Financial Institutions

The integration of Shariah compliance in information system of Islamic financial institutions

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdullah Mohammed Ayedh ◽  
Wan A’tirah Mahyudin ◽  
Mohamad Subini Abdul Samat ◽  
Harith Hamidi Muhamad Isa
Keyword(s):  
Information System ◽  
Financial Institutions ◽  
Internal Control ◽  
Basic Knowledge ◽  
Regulatory Body ◽  
System Technology ◽  
Content Type ◽  
Future Studies ◽  
Islamic Financial Institutions ◽  
Information System Technology

Purpose The purpose of this study is to explore the integration of Shariah compliance in the information system of Islamic financial institutions (IFIs) in the context of Malaysia. Design/methodology/approach By applying qualitative approach in the form of in-depth/structured interview of qualified respondents within Islamic financial industries. Findings The result of this study indicates that information system advancement will give an increasing level of competitive advantages. Also, the result indicates that the internal control and information system played a vital role in ensuring the Shariah compliance and translating and circulating the Shariah guidelines among the IFIs’ departments and staffs. In terms of Shariah integration in information system, there is a consideration during the development of an information system. Shariah will be an element that needs to be accounted for to develop the information system for IFI. Research limitations/implications This includes the scope of the study which is based on Malaysian Islamic banks only. Hence, future studies are recommended to extend this endeavor to other contexts as well. Furthermore, although the initial sample was covering nine IFIs, only two IFIs accepted to participate in the interview. It is suggested that the future studies involve more participants and apply different research techniques such as focus groups or questionnaire survey. Practical implications Make sure employees who are in charge of performing any function related to Shariah (i.e. Shariah review, Shariah audit, Shariah research, Shariah risk management) have a basic knowledge on information technology (IT) and information system. Continuous trainings for IFIs’ employees covering the information system and internal control system issues related to the Shariah compliance. Focus on seminars and conferences on outstanding issues related to information system technology in IFIs. Promoting programs and subjects specialized in information system technology in IFIs. IFIs should allocate a budget for system development or enhancement in the financial budget ensuring that IT system is incorporated in Shariah compliance. IFIs should consider enhancement of Shariah compliance encompass and the alignment into the IT system as continuous process, as well as one of their strategic plan aspects. Bank Negara Malaysia as a regulatory body of IFIs should emphasize on regulating the Shariah aspects with regard to the IT system. Originality/value This paper’s contributions lies in the enhancement of the development of the Shariah compliance literature, as well in the integration of Shariah compliance and information system in IFIs.

scholarly journals STANDARDIZATION OF INTERNAL SHARIA AUDIT

2019 ◽  
Vol 8 (7) ◽  
Author(s):  
Irina V. Novikova ◽  
Firdaus I. Kharisova
Keyword(s):  
Quality Control ◽  
Financial Markets ◽  
Financial Institutions ◽  
Internal Control ◽  
Effective Means ◽  
Internal Audit ◽  
Financial Products ◽  
Gulf Countries ◽  
Islamic Financial Institutions ◽  
Audit Activity

The significant growth rates of the Islamic economy and the great interest in Islamic financial products and services from among other non-Islamic partners have determined the need to tighten control over the observance of Sharia norms and rules by Islamic Financial Institutions. Internal audit has long established itself as one of the most effective means of internal control and improving the efficiency of organizations. That is why AAOIFI has developed a new standard, “Internal Sharia Audit,” which should form the basis for the operation of the largest IFIs in Malaysia and the Gulf countries. For Russia, this standard is of particular interest in the changing context of financial markets and the redistribution of investment flows. The paper provides a brief overview of the most significant provisions of the presented standard. Details were considered regarding significant changes from the earlier standard released by AAOIFI. Based on the fundamental principles of audit activity, special attention is paid to the organizational independence and objectivity of internal Sharia auditors, as well as to quality control of the audit procedures. As in the standard itself, the paper analyses the requirements for the skill level of internal Sharia auditors

scholarly journals The Shariah Audit Framework from Practitioners’ Perspective: A Mirage or Fact?

2020 ◽  
pp. 1-16
Author(s):  
Noor Aimi Mohamad Puad ◽  
Nurdianawati Irwani Abdullah ◽  
Zurina Shafii
Keyword(s):  
Financial Institutions ◽  
Internal Control ◽  
Positive Development ◽  
Structured Interviews ◽  
Market Participants ◽  
Audit System ◽  
Compliance Officers ◽  
Islamic Financial Institutions ◽  
Shariah Governance ◽  
Balance Functions

The positive development of Islamic financial system nowadays leads to the growth of products and services offered by Islamic financial institutions. However, some of them may have overlooked certain aspects that could affect Shariah-compliancy of the products and services. The occurrence of Shariah non-compliance risk may would adversely affect the reputation of Islamic finance and the confidence of market participants among depositors and investors. This scenario calls for a systematic check-and-balance functions within the institution. Shariah auditor being one of the components of Shariah governance plays an important role in ensuring the effectiveness of internal control system for Shariah compliance. Prior research reveals that the standard Shariah audit framework has not been developed yet; thus, the present practice is carried out by the internal institutional effort which heavily relies on the conventional audit system. The aim of this study is to explore the relevancy of Shariah audit framework from the eyes of practitioners of various Islamic financial institutions; whether it is a new innovative discipline or merely replicating the conventional audit structure. Ten semi-structured interviews were conducted involving selected auditors, Shariah compliance officers and Shariah committee members. Thematic analyses were adopted to analyze the data. It can be deduced that there is a need for a specific Shariah audit framework as a benchmark but with certain requirements and limitations. This study may provide relevant guidelines especially for policymaker in developing a standardized specific framework for Shariah audit.

Shari’ah Audit Disclosure in annual reports: A comparison study between Bahrain and Malaysian Islamic Financial Institutions

2016 ◽  
Vol 4 (2) ◽  
pp. 202-218
Author(s):  
ڕێبوار محمد احمد ◽  
◽  
هێمن محمد عزیز ◽  
بصيرة ماجيد نجم ◽  
◽  
...  
Keyword(s):  
Financial Institutions ◽  
Annual Reports ◽  
Comparison Study ◽  
Islamic Financial Institutions

Analisis Kontrak Ijarah

2018 ◽  
Vol 4 (2) ◽  
pp. 201-213
Author(s):  
Puji Kurniawan
Keyword(s):  
Financial Institutions ◽  
Profit Sharing ◽  
Fundamental Difference ◽  
Human Needs ◽  
The People ◽  
Islamic Financial Institutions

Humans are social creatures who need each other to socialize or to fulfill their needs, such as primary, secondary and tertiary needs. In this life there are 2 (two) groups of people, namely groups of people who are overfunded and those who are underfunded. Therefore, banks and non-bank financial institutions have emerged as intermediaries between the 2 (two) groups of the people so that the balance can occur in meeting the needs of each life. In Indonesia, there are many conventional and sharia bank and non-bank financial institutions that provide financing services to meet human needs. The fundamental difference between conventional and Islamic financial institutions is the use of the interest system which is usury in conventional financial institutions and the use of profit sharing systems in Islamic financial institutions.

BANK CONTROL IN THE SYSTEM OF ISLAMIC FINANCIAL INSTITUTIONS: USE IN RUSSIA

2020 ◽  
Vol 1 (1) ◽  
pp. 268-273
Author(s):  
Аль-Гаррави Мохаммед Абдулвахид Джайяс ◽  
Keyword(s):  
Financial Institutions ◽  
Islamic Financial Institutions
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