External Sharī‘ah audit and review committee Vis‐a‐Vis Sharī‘ah compliance quality and accountability

A case of Islamic banks in Bangladesh

Bibliographic Data

ID12705142
AuthorsMd Kausar Alam (0000-0002-9748-5862, Faculty of Economics and Management Universiti Putra Malaysia (UPM) Seri Kembangan Malaysia, corresponding author), Abu Umar Faruq Ahmad (0000-0003-1523-1883, King Abdulaziz University), Aishath Muneeza (0000-0002-1107-8511, School of Professional Studies International Centre for Education in Islamic Finance (INCEIF) Kuala Lumpur Malaysia)
Year2020
Volume22
Issue1
Publication date2020-09-02
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Public Affairs (JOURNAL)
Journal identifiersISSN: 1472-3891 • E-ISSN: 1479-1854
PublisherWiley (PUBLISHER • GB)
DOI10.1002/pa.2364
OpenAlexW3083273878
LanguageEN
References cited50

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

Accountability · Agency (philosophy · Audit · Audit Committee · Business · Compliance (psychology · Internal audit · Islam · Joint audit · Legitimacy · Obligation · Political science · Public relations · Quality (philosophy · Quality audit · Sociology · Stakeholder · Islamic Finance and Banking Studies · Law · Microfinance and Financial Inclusion · Psychology · Taxation and Compliance Studies · Accounting

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