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The Independence of Religious and External Auditors: The Case of Islamic Banks

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 1 December 1990



Islamic banks are subject to religious audit in addition to the normal financial auditing process which is carried out in other business organisations. The former type of audit is conducted by in‐house religious advisers who are employed by the bank. These advisers issue a special report to assure readers that the financial statements of the bank were in accordance with the Islamic Law. This article compares and contrasts the independence of these religious auditors with external auditors. It puts forward theoretical propositions which reflect the possible behaviour of the consumers of the financial statements under situations where Shari′a Supervisory Board (SSB) reports discovered breaches of Islamic precepts by management. It is also argued that it is necessary that both SSB and the external auditor be perceived to be independent to ensure the credibility of the financial statements.



Ahmed Abdel Karim, R. (1990), "The Independence of Religious and External Auditors: The Case of Islamic Banks", Accounting, Auditing & Accountability Journal, Vol. 3 No. 3.




Copyright © 1990, MCB UP Limited

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