Quality of Shariah compliance assurance in Malaysian Islamic Banks posts implementation of Shariah governance framework
Shariah board has been a great spur to the prudence of Islamic banks by ensuring Shariah compliance on the operations of Islamic banks. The aim of this study is to investigate the quality of Shariah compliance assurance from the Shariah compliance review and audit carried out in Islamic banks....
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| Format: | Thesis |
| Language: | English |
| Published: |
2016
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/65962/1/GSM%202016%201%20UPM%20IR.pdf |
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| Summary: | Shariah board has been a great spur to the prudence of Islamic banks by ensuring
Shariah compliance on the operations of Islamic banks. The aim of this study is to
investigate the quality of Shariah compliance assurance from the Shariah
compliance review and audit carried out in Islamic banks. In doing so, the role of
Shariah boards and other internal mechanisms available to support this role have
been critically evaluated. This study used a qualitative case study research design
and employed semi-structured interviews to gain an in-depth understanding on the
current governance practiced in Islamic banks. Analysis from interviews
conducted with fourteen key individuals in two Islamic banks indicated that the
quality of Shariah compliance assurance provided by Shariah board has improved.
The emphasis on Shariah audit laid down in Shariah Governance Framework
(SGF) has enhance the credibility of Shariah board in providing a quality Shariah
assurance on the operations of Islamic bank. However, the empirical findings
indicated that the Shariah compliance review roles of Shariah boards were not
effectively undertaken by Shariah board as they were highly dependent on the
report of Shariah Department Officer. In addition, Shariah board only participates
in the development of Shariah audit plan and later endorses audit findings carried
out by Shariah Audit Officers. Drawing from this heavy reliance of Shariah board
on the work of Internal Shariah Officers of Islamic banks, the call for External
Shariah Auditor to provide Shariah compliance assurance remains a focal point
deemed more credible to the stakeholders. |
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