Definitive Elements of The Efficiency of Internal Shariah Audit in Islamic Financial Institutions

Abstract

In Islamic financial institutions (IFI), an effective internal Shariah audit system is extremely important in order to maintain financial transactions in accordance with Islamic principles and rules. Therefore, the aim of this study is to reveal the determinants of the effectiveness of internal Shariah auditing in IFIs. A comprehensive literature review approach was preferred as a method in the study. As a result, the effectiveness of internal Shariah audit as a mechanism to ensure the observance of Islamic provisions by IFIs; It is determined by five factors: the support of the top management, the internal Shariah audit process and activities, the independence of internal Shariah auditors, the competence and job performance of internal Shariah auditors, and the effectiveness of the audit committee. The study will contribute to the existing literature on effective internal Shariah audit frameworks; It is also thought to be a conceptual guide for both IFIs and regulators to improve the effectiveness of the internal Shariah audit system in IFIs.