Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

The Role of Shariah Supervisory Board on Internal Shariah Audit Effectiveness: Evidence From Bahrain

Author(s): Azam Abdelhakeem Khalid, Hasnah Haron, Adel M. Sarea,Tajul Ariffin Masron

This paper examined the role of Shariah supervisory board (SSB) on internal Shariah audit effectiveness in Islamic financial institutions (IFIs) in Bahrain. The study employed two stages of data collection and analysis: review of the literature and structured interview with SSB and Head of internal Shariah audit departments deemed important within the IFIs, to examine the role of SSB on internal Shariah audit effectiveness. The paper concluded that Islamic agency theory could serve as a theoretical foundation to build the conceptual framework on internal Shariah audit effectiveness. In the light of the theory, it was proposed that internal Shariah audit effectiveness could be enhanced by their SSB, independence and experience. Due to the position of SSB as the ultimate oversight organ in the IFIs, the SSB could influence on internal Shariah audit effectiveness in IFIs. The research perspective, this is the first study using Islamic agency theory to examines the role of SSB on internal Shariah audit effectiveness in IFIs in Bahrain.