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Shariah auditing strengthens Shariah compliance while also enhancing the Islamic Financial Institutions' (IFIs) integrity. They arose as a response to the different natures and characteristics of IFIs including Takaful Operators. Failure to comply with shariah to the letter can have an impact on the legality and enforceability of Islamic finance transactions, as well as increasing financial and non-financial risks to IFIs. Due to that, it is critical for IFIs to have a thorough internal control system for Shariah compliant in order to effectively manage all Shariah issues. The focus of this study is to ensure that Shariah-compliance issues are adequately addressed, as Shariah non-compliance is a threat to all IFIs. Prior research reveals that there was a restrictive focus in the development of the audit scope as currently, the scope cover does not specifically cover financial statements nor the internal control systems relating to Shariah objectives. Thus, the aim of this study is to examine the scope of shariah audit developed by the auditors when conducting shariah audit. To achieve audit objective, semi-structured interviews were conducted involving selected committee members and shariah auditors of Takaful Operators. The study discovered that Takaful Operator addressed the requirement in the existing guidelines when developing their shariah audit scope. This study may provide relevant suggestions especially for the Takaful industry player in enhancing their shariah audit practice towards robust practice.
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In-Text Citation: (Puad, 2021)
To Cite this Article: Puad, N. A. M. (2021). The Development of Shariah Audit Scope in Malaysian Takaful Industry: A Preliminary Analysis. International Journal of Academic Research in Accounting Finance and Management Sciences, 11(3), 465–486.
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