Shari'ah Parameters of Musharakah Mutanaqisah in Islamic Finance: The Experience of Australian Institutions Offering Islamic Financial Services

Ahmad, Abu Umar Faruq

doi:10.55188/ijif.v3i2.130

Cited by 8 publications

(10 citation statements)

References 3 publications

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“…The Shariah audit process should be carried out in accordance with the established Shariah criteria, which include the written opinions of the Shariah Advisory Council (SAC), the Shariah guidelines provided by Bank Negara Malaysia, the written opinions of the Shariah Committee members, and the product manuals of the IFIs (Abdul Rahman, 2011). Internal Shariah auditors should have complete access to the audit evidence in IFIs in order to implement an effective Shariah audit process, and the auditable areas should include assessments of internal control systems for Shariah compliance, risks of non-compliance, and audits of product information and reporting (International Shariah Research Academy (ISRA), 2011).…”

Section: Shariah Audit Practice For Malaysian Ifimentioning

confidence: 99%

“…Internal audit reporting needs to be accurate and able to meet stakeholder expectations (The International Institute of Internal Auditors (IIA), 2011). In addition, Abdul Rahman (2011) emphasized that internal Shariah audit reports should be approved by the Board Audit Committee and include any findings of Shariah non-compliance, an evaluation of the frequency of non-compliance, timelines for correction, and an opinion on the effectiveness of internal control systems for Shariah compliance.…”

Section: Shariah Audit Practice For Malaysian Ifimentioning

confidence: 99%

“…In light of this, the IFIs sector demands a sound accounting and reporting system that complies with Shariah criteria and applicable to real-world use (Abdul Rahman, 2003). According to Abdul Rahman (2011), Shariah auditors should be capable of applying internal auditing standards, accounting principles, comprehending management principles, using relevant Shariah audit tests, and having good interpersonal communication skills. The same competence requirements, which are crucial to ensuring the successful performance of the Shariah audit role in IFIs, were also laid forth by the International Shariah Research Academy (ISRA).…”

Section: The Development Of Accounting Standard In the Shariah Auditmentioning

confidence: 99%

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The Adoption of Accounting Base in External Shariah Audit Report

Zamri,

Fadilah Ishak,

Hassan

2023

IJARAFMS

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Shariah compliance is the industry's core value proposition and the cornerstone of the worldwide Islamic financial sector. To ensure compliance and uphold the legitimacy of Islamic finance among stakeholders, a number of efforts are being implemented in various countries. One such approach that offers greater independence than others in providing Shariah assurance is external Shariah audit. External Shariah auditors of IFIs carry out financial audit tests in addition to testing for adherence to the Shariah Advisory Council's (SAC) norms and regulations for Islamic Financial Institutions (IFIs). The Malaysian Accounting Standards Board (MASB) anticipates creating unique standards for Malaysian IFI in the future. This study aim to examine the need of adoption accounting base in external Shariah audit report. This study is a conceptual paper which base on the discussion of literature review and library research. The research offers practical implication to authority body in accounting to formulate special accounting standard for external Shariah audit report among IFI.

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Section: Shariah Audit Practice For Malaysian Ifimentioning

confidence: 99%

Section: Shariah Audit Practice For Malaysian Ifimentioning

confidence: 99%

Section: The Development Of Accounting Standard In the Shariah Auditmentioning

confidence: 99%

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The Adoption of Accounting Base in External Shariah Audit Report

Zamri,

Fadilah Ishak,

Hassan

2023

IJARAFMS

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“…Prevailing issues of Shariah governance in IFIs were highlighted not in terms of offering Shariah noncompliance products and services but mainly due to bad governance and the lack of risk management (Askari et al, 2011). Such issues could lead to Shariah non-compliance risks, which then affect the integrity of IFIs to uphold its distinctive features of Shariah compliance in IFIs' business operations (Abdul Rahman, 2011).…”

Section: Introductionmentioning

confidence: 99%

The extent of mandatory and voluntary Shariah compliance disclosure: evidence from Malaysian Islamic financial institutions

Ghani

Ariffin

Rahman³

2023

JIABR

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Purpose This study aims to assess the extent of the mandatory and voluntary Shariah compliance disclosure in the Shariah Committee Report of Islamic financial institutions (IFIs) in Malaysia. The study highlights the accountability and transparency of the Shariah Committee members to provide full disclosure of relevant Shariah compliance information to the stakeholders. Design/methodology/approach The study adopts content analysis to quantify and code the number of sentences in the Shariah Committee Report disclosed in the 2016 annual report of 47 IFIs in Malaysia. The extent of Shariah compliance disclosure in the Shariah Committee Report is measured based on the Standard (S) and Guidance (G) items outlined in the Shariah Governance Framework (SGF) as well as the Financial Reporting for Islamic Banking Institutions and takaful operators guidelines issued by Bank Negara Malaysia (BNM) as the reference. Findings The findings indicate that majority of IFIs complied with the minimum mandatory disclosure requirement based on the Standard (S) items in the Shariah Committee Report as required by the SGF. Highest information on the purpose of Shariah Committee engagement and scope of work performed is disclosed to the stakeholders in almost all IFIs. Only two prominent full-fledged Islamic bank and Islamic banking business in development financial institutions have shown highest accountability to go beyond the minimum disclosure requirement. This includes disclosing higher voluntary information on Shariah governance processes in the Shariah Committee Report of these two IFIs. Research limitations/implications This study adopts the SGF (Bank Negara Malaysia, 2010), Financial Reporting for Islamic Banking Institutions (Bank Negara Malaysia, 2016) and Financial Reporting for Takaful Operators (Bank Negara Malaysia, 2015) as the reference to develop the measurement of Shariah compliance disclosure in the Shariah Committee Report. These guidelines issued by BNM are still effective during the period of study, i.e. the year 2016. Practical implications The findings contribute towards the relevance for BNM as the regulator to enhance the current disclosure requirement in the Shariah Committee Report as stated in the SGF especially in Islamic windows and takaful operators. The main argument of this paper is that the more information being disclosed in the Shariah Committee Report will lead to better Shariah assurances. The issuance of Shariah Governance Policy Document in 2019 is expected to enhance the credibility, accountability and transparency of the Shariah Committee members concerning their oversight responsibility towards Shariah matters in IFIs’ business operations. Originality/value After five years since the issuance of the SGF in 2010, further study on the extent of mandatory and voluntary Shariah compliance disclosure is important to highlight the accountability and transparency on the implementation of the Shariah governance across various types of IFIs in Malaysia.

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“…This market and its related stakeholders are growing in dominant Muslim countries and nonMuslim countries. One of the prominent reasons for that growth is the value proposition organic ingredients, business practices of helping customers and benefit society (Ahmed, 2011). Shariah values help in enhancing ethics.…”

Section: Introductionmentioning

confidence: 99%

Factors enabling pervasiveness of belief and ethics-based marketing practice: an interpretive structural modeling approach

Mustafa

Sharma

2022

JIMA

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Purpose This study aims to identify enablers of belief and ethics-based marketing practices, establish relationships among the factors and present them in a hierarchical model to derive critical insights. This paper emphasizes interpretations of the in-depth interviews to decipher the market pervasiveness of the evolved model. Design/methodology/approach In-depth interviews were conducted with individuals and small groups of informed and elite respondents pursuing marketing guided explicitly by ethics and led by belief. The interview data further corroborated with the related literature contributed to specific factors. Finally, interpretive structural modeling has been implemented step by step to develop a systematic model for enablers. Findings This paper contributes a structural relationship of morality and ethics, strengthening faith and belief through philosophical understanding, which traverses into the actions related to societal benefits with the support of market opportunity development while bringing in value, enhancing the demand in return and establishing market pervasiveness. The crux of this paper is that the foundation of belief will reduce the hierarchy of other related factors while strengthening their interdependencies with equity to contribute to the development of the pervasiveness of the market for such organizations. Originality/value To the best of the authors’ knowledge, this is the first study exploring and examining the enablers contributing to belief and ethics-based organizations’ pervasiveness along with their interrelationships. The initial intrigue that led to the inquiry was evidence of the market pervasiveness of such organizations’ products and services across various streams.

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Shari'ah Parameters of Musharakah Mutanaqisah in Islamic Finance: The Experience of Australian Institutions Offering Islamic Financial Services

Cited by 8 publications

References 3 publications

The Adoption of Accounting Base in External Shariah Audit Report

The Adoption of Accounting Base in External Shariah Audit Report

The extent of mandatory and voluntary Shariah compliance disclosure: evidence from Malaysian Islamic financial institutions

Factors enabling pervasiveness of belief and ethics-based marketing practice: an interpretive structural modeling approach

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