Follow Up in Shariah Auditing: Multiple Approaches by Takaful Operators
DOI:
https://doi.org/10.53840/ijiefer9Keywords:
shariah audit, Takaful, audit process, follow upAbstract
The growth of Islamic finance in Malaysia has been supported by strong financial institution structures and a robust regulatory framework. This include the function of shariah audit which has become mandatory since the issuance of Shariah Governance Framework in 2011 and it recently has been further enhanced in the Shariah Governance policy document 2019. The main objective of the shariah audit function is to provide independent evaluation and objective assurance designed to add value and improve Shariah compliance among Islamic Financial Institutions. To ensure the effectiveness of this function, the shariah audit process must be conducted comprehensively. However, the insufficiency of specific shariah audit guidelines becomes the challenge for auditors to conduct a comprehensive shariah audit procedure including the crucial final stage; follow up process. Therefore, the main objective of this study is to analyse the approaches of follow-up process which have been practised by Takaful Operators in Malaysia. A series of semi-structured interviews were undertaken with the auditors in Malaysian Takaful Operators who were involved directly in the shariah audit process. This study offers in-depth explanation on the follow-up process and provides recommendations on the characteristics of the best practice to be adopted for the follow-up process. The recommendations from the study are useful in enhancing the current shariah audit practices as well as improving the shariah audit quality.
Downloads
References
Abdul Manaf, S., & Che Pa, B. (2017). Practical Implementation of Hisbah Concepts in Shariah Audit Administration of Bank Islam Malaysia Berhad. Journal Research in Islamic Studies, 4(3), 47-57.
Ahmad, M. M. A., Mustafa, Z., & Nordin, B. (2016). Pemerkasaan Masjid Melalui Sistem Hisbah. E-Academia Journal, 5(2), 66-72E-Academia Journal.
Ahmad, N. L., Ahmed, H., & Wan Mustaffa, W. S. (2017). The Significance of Islamic Ethics to Quality Accounting Practice. International Journal of Academic Research in Business and Social Sciences, 7(10).
Alhabshi, S. O., & Abdul Razak, S. H. S. (2009). Takaful: Concept, History, Development, and Future Challenges of its Industry. Islamic and Civilization Renewal, 1(2), 276-291.
Attahiru, M. S., Al-Aidaros, A., & Md. Yusof, S. (2016). Moderating Role of Hisbah Institution on the Relationship of Religiosity and Islamic Culture to Islamic Work Ethics in Nigeria. International Review of Management and Marketing, 6(8), 125-132.
Bashar, T. A., & Dutsin, A. M. (2018). The Role of Hisbah in Promoting Ethical Values among the Muslim Ummah in the Classical Period of Islam. Journal of Islamic Studies and Culture, 6(2), 39-44.
Bryman, A. (2012). Social Research Methods (Fourth ed.): OUP Oxford.
Chambers, R. (2019). The Fallacy of Follow-up Audits. Retrieved March, 2019, from https://iaonline.theiia.org/blogs/chambers/2019/Pages/The-Fallacy-of-Follow-up-Audits.aspx
Chartered Institute of Internal auditor. (2018). from https://www.iia.org.uk/
Ghani, N. L. A., Ariffin, N. M., & Rahman, A. R. A. (2019). The Measurement of Effective Internal Shariah audit Function In Islamic Financial Institutions. International Journal of Economics, Management and Accounting, 27(1), 141-165.
Gurama, M., & Mansor, Z. (2018). Integrated Internal Audit Model for Effective Internal Auditing Performance in Nigerian Tax Administration. Asian Journal of Economics, Business and Accounting, 7(3), 1-7.
Gwilliam, J. (2016). Internal Audit Follow Ups: Are They Really Worth the Effort. Retrieved May, 2018, from https://www.chakrapartners.com/internal-audit-follow-ups-are-they-really-worth-the-effort/
Hakim, A. L. (2017). Application of Three Lines of defense in Islamic Financial Institution. International Journal of Management and Applied Research, 4(1), 44-57.
Hanefah, H. M. M., Shafii, Z., Salleh, S., & Zakaria, N. (2012). Governance and Shariah Audit in Islamic Financial Institutions: USIM.
Htay, S. N., Hamat, M., Wan Ismail, W. Z., & Salman, S. A. (2015). Takaful (Islamic Inusrance: Historical, shari’ah and Operational Perspectives. International Business Management, 9(1), 65-69.
Hussain, M. M., & Pasha, A. T. (2011). Conceptual and Operational Differences between General Takaful and Conventional Insurance Australian Australian Journal of Business and Management Research, 1(8), 23-38.
Ibrahim, A. (2017). Hisbah in Human Management: An Analysis on Contemporary Research Patterns. International Journal of Academic Research in Business and Social Sciences, 7(12), 48.
Ibrahim, A. Q., Hj. Don, A. G., & Asha’ari, M. F. (2017). Konsep Hisbah dan Pengurusan Hal Ehwal Islam Mais dan Jais di Negeri Selangor Darul Ehsan. Jurnal Al-Anwar, 1(3), 51-66.
Imran, M. S., Ahmad, A., & Bhuiyan, M. Z. S. (2012). Auditing in Islamic Perspective and Auditing as Practiced in some selected Islamic Banks Operating in Bangladesh. IIUC Studies, 9(1), 293-306.
Ince, M. (2016). Follow-up mechanism: A missing-link in audit cycle. Sayıştay Dergisi, 109-123.
Institute of Internal auditors. (2014). from https://na.theiia.org/Pages/IIAHome.aspx
Iskandar, T. M., Jamil, A., Yatim, P., & Sanusi, Z. M. (2018). The role of internal audit and audit committee in the implementation of enterprise risk management. International Journal of Business and Globalisation, 21(2), 239-260.
Islahi, A. I. (2014). Economic Thought of Muhammad Abduh: An omitted aspect of his biography. MPRA Paper.
Kamaruddin, M. I. H., & Hanefah, M. M. (2017). Enhancing Shariah audit practices in Islamic financial institutions in Malaysia. Journal of Modern Accounting and Auditing, 13(11).
Kasim, N., Mohd Sanusi, Z., Mutamimah, Y., & Handoyo, S. (2013). Assessing the current practice of Auditing in Islamic Financial Institutions in Malaysia and Indonesia International Journal of Trade, Economics and Finance, 4(6).
Kenessy, I. (2014). Why follow up? By revisiting audits, internal auditors can monitor the status of corrective actions and recommendations. Internal auditor.
Kothari, C. R. (2004). Research Methodology: Methods and Techniques (Second ed.). New Delhi: New Age International Publishers.
Lahsasna, A., & Hameed, S. (2015). Audit methodology and audit evidence in Islamic finance. INCEIF.
Masood, A., & Lodhi, R. N. (2015). Factors Affecting the Success of Government Audits: A Case Study of Pakistan. Universal Journal of Management, 3(2), 52-62.
Mohd Arif, M. I. A., & Markom, R. (2018). The Sustainability of the Muamalat principles in the Islamic Banking System of Malaysia: the Shariah Governance Framework. Journal of Law and Society (Special issues), 19-37.
Muhammad, R. (2011). Shariah Compliance Process and Corporate Governance In Islamic Banking Institutions (IBIs): A Proposed Model. Journal of Accounting Perspectives, 4, 36-48.
Newman, W., Alban, M., Sitcha, & Ongayi, W. (2019). Literature Review on Non-Implementation of Internal Audit Recommendations in an Organization. Academy of Entrepreneurship Journal, 25(2).
Noor, M. A., & Rahman, M. A. H. A. (2016). Cooperative Takaful for Non-Banking Financial Institutions: Islamization of SOCSO in the case of Malaysia. Intellectual Discourse, Special issues, 459-476.
Nurhasanah, N. (2013). Islam dalam Operasional Lembaga Keuangan Syariah. MIMBAR, 29(1), 11-18.
Rahman, N. A., Matsuki, N., Kasim, N., & Osman, M. R. (2018). Risk Based Internal Shariah Audit Practices in the Islamic Bank. The Journal of Social Sciences Research, Spesial issues (5), 954-961.
Razif, N. A. M., & Rodi, M. S. M. (2017). Uswah Hasanah Country of Khalifah Umar Abdul Aziz: An Islamic Political Economy Research. International Journal of Academic Research in Business and Social Sciences, 7(6), 632-644.
Russell, J. P. (2019). Better together: An audit is meaningless without effective follow-up. Retrieved January, 2019, from https://www.qualitywbt.com/better-together-an-audit-is-meaningless-without-effective-follow-up/
Sadeghi, M. (2010). The evolution of Islamic insurance- Takaful:A literature survey. Insurance Markets and Companies: Analyses and Actuarial Computations, 1(2), 100-107.
Salman, S. A., & Htay, S. N. N. (2013). Prospects of Islamic Insurance in India. International Journal of Business, Management & Social Sciences, 2(7), 104.
Setyaningrum, D., Gani, L., Martani, D., & Kuntadi, C. (2013). The Effect of Auditor Quality on the Follow-Up of Audit Recommendation. International Research Journal of Business Studies, 1(2), 89-104.
Shafii, Z., Abidin, A. Z., Salleh, S., Jusoff, K., & Kasim, N. (2013). Post implementation of shariah governance framework: The impact of shariah audit function towards the role of shariah committee. Middle East Journal of Scientific Research, 13, 7-11. doi: 10.5829/idosi.mejsr.2013.13.1874
Sharifuddin, S. S., Kasmoen, N. A., Taha, N. H. M., Taalat, N. S. M. A., & Taalat, A. Z. M. A. (2016). The Concept of Takaful (Islamic Insurance) and Its Functions in the Establishment of Syarikat Takaful Malaysia; the First Takaful Operator in Malaysia. International Journal of Humanities and Social Science Invention, 5(12), 43-48.
Simpson, A. (2019). Following up internal audit findings. The Journal of The Global Accounting Alliance.
Umor, S., Zakaria, Z., Sulaiman, N. A., & Kutty, R. M. (2018). Preliminary insights: isomorphism and effectiveness of performance auditing issues follow-up International Journal of Engineering & Technology, 7, 121-128.
Yusoff, S. A. (2013). Prospects of a Shari’ah audit framework for Islamic financial institutions in Malaysia. Islamic and Civilisation Renewal, 4(1), 80.
Downloads
Published
How to Cite
Issue
Section
License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.