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Relationship between internal Shariah audit characteristics and its effectiveness

Azam Abdelhakeem Khalid (Department of Accounting, Universiti Sains Malaysia, Minden, Malaysia)
Hasnah Haj Haron (Department of Accounting, Universiti Malaysia Pahang, Kuantan, Malaysia)
Tajul Ariffin Masron (Department of Islamic Finance, Universiti Sains Malaysia, Minden, Malaysia)

Humanomics

ISSN: 0828-8666

Article publication date: 8 May 2017

Abstract

Purpose

This paper aims to examine the characteristics influencing internal Shariah audit effectiveness in Islamic financial institutions (IFIs) in Bahrain.

Design/methodology/approach

Data were collected from 76 internal Shariah auditors, 23 Shariah supervisory board and 16 audit and governance committee from 52 IFIs in Bahrain. The data were analyzed using structural equation method via SmartPLS 2.0 to examine the relationship between characteristics and effectiveness of internal Shariah audit.

Findings

It was found that competency and work performance were positively significant with internal Shariah audit effectiveness. The findings revealed that the main competency of internal Shariah audit to influence effectiveness were to have professional certification and skills, while work performance to influence effectiveness were engagement planning, performing the engagement and communicating results with management and having sufficient information to provide sound opinion formed by Shariah audit.

Originality/value

From the research perspective, this is the first study that examines the relationship between internal Shariah audit characteristics and its effectiveness in Bahraini IFIs.

Keywords

Citation

Khalid, A.A., Haron, H.H. and Masron, T.A. (2017), "Relationship between internal Shariah audit characteristics and its effectiveness", Humanomics, Vol. 33 No. 2, pp. 221-238. https://doi.org/10.1108/H-11-2016-0084

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited