Publication:
Internal control, risk and Sharīʿah non-compliant income in Islamic financial institutions

Simple item page
cris.lastimport.scopus2024-12-06T16:56:37Z
cris.lastimport.wos2024-12-06T16:47:05Z
cris.virtual.departmentUniversiti Sains Islam Malaysia
cris.virtual.departmentUniversiti Sains Islam Malaysia
cris.virtual.departmentUniversiti Sains Islam Malaysia
cris.virtual.departmentUniversiti Sains Islam Malaysia
cris.virtual.departmentUniversiti Sains Islam Malaysia
cris.virtual.orcid0000-0002-3173-2269
cris.virtual.orcid0000-0002-0880-6856
cris.virtual.orcid#PLACEHOLDER_PARENT_METADATA_VALUE#
cris.virtual.orcid0000-0002-1476-1199
cris.virtual.orcid0000-0003-2929-0841
cris.virtualsource.department8f487b37-df7b-45e4-aecf-3eb3aace635b
cris.virtualsource.department5a5bee87-d79b-4e24-8cdd-7ed22cdcd6f1
cris.virtualsource.department6dff896c-4de6-4fce-8453-006aee0c5ea5
cris.virtualsource.department48ac6131-67ac-44a7-ac1e-987d3baaa569
cris.virtualsource.departmentab490b21-2407-44c7-8271-7abaace09f08
cris.virtualsource.orcid8f487b37-df7b-45e4-aecf-3eb3aace635b
cris.virtualsource.orcid5a5bee87-d79b-4e24-8cdd-7ed22cdcd6f1
cris.virtualsource.orcid6dff896c-4de6-4fce-8453-006aee0c5ea5
cris.virtualsource.orcid48ac6131-67ac-44a7-ac1e-987d3baaa569
cris.virtualsource.orcidab490b21-2407-44c7-8271-7abaace09f08
dc.contributor.authorMustafa Mohd Hanefah
dc.contributor.authorMuhammad Iqmal Hisham Kamaruddin
dc.contributor.authorSupiah Salleh
dc.contributor.authorZurina Shafii
dc.contributor.authorNurazalia Zakaria
dc.date.accessioned2024-05-29T02:25:50Z
dc.date.available2024-05-29T02:25:50Z
dc.date.issued2020
dc.description.abstractPurpose: The existence of internal control for Sharīʿah-compliance promotes reasonable assurance that the Islamic financial institution’s (IFI’s) objectives are achieved in the following categories, namely, the effectiveness and efficiency of operations, the reliability of financial reporting and the level of compliance with applicable laws and regulations, as well as accounting and auditing standards. Sharīʿah non-compliant income (SNCI) is an important issue in IFIs’ operations. Thus, the purpose of this paper is to identify issues related to governance and internal control of SNCI in selected IFIs in Malaysia. Design/methodology/approach: This research uses a case study approach to gather data on the measures of governance and risk management in relation to the internal control for SNCI in IFIs. Interviews were conducted with officers of the Sharīʿah and internal audit departments on internal control practices regarding SNCI. Findings: Regulator’s guidelines on SNCI are simple and brief, lacking rigour in terms of governance, risk management and audit procedures. The section on SNCI is only a brief statement within the Bank Negara Malaysia’s Guidelines on Financial Reporting for Islamic Banking Institutions and also in the Operational Risk Integrated Online Network system operated by IFIs. Most of the respondents in the interviews suggested that there should be a proper guideline in determining the classification of SNCI. Second, although IFIs have established the purification account to manage SNCI, the real practice varies from one IFI to another. Third, although there are supposedly documented procedures established in relation to management and administration of SNCI, the following events still occur in practice, namely, no authorisation from the Sharīʿah Committee (SC) on various types of income channelled to the SNCI account; unauthorised use of SNCI for other purposes; SNCI not being reported in the annual financial reports; and distribution of SNCI prior to obtaining the SC’s consent. Fourth, there is an absence of Sharīʿah risk assessment conducted on operational risk by IFIs to identify any potential Sharīʿah non-compliant event. Research limitations/implications: This research contributes to the importance of Islamic corporate governance theory and Sharīʿah risk management, as well as strengthening the case for reporting SNCI to shareholders. It also contributes to the body of knowledge on the capability of the management in managing the internal control system of IFIs’ SNCI.en_US
dc.identifier.citationHanefah, M.M., Kamaruddin, M.I.H., Salleh, S., Shafii, Z. and Zakaria, N. (2020), "Internal control, risk and Sharīʿah non-compliant income in Islamic financial institutions", ISRA International Journal of Islamic Finance, Vol. 12 No. 3, pp. 401-417. https://doi.org/10.1108/IJIF-02-2019-0025en_US
dc.identifier.doi10.1108/IJIF-02-2019-0025
dc.identifier.epage417
dc.identifier.issn2289-4365
dc.identifier.issue3
dc.identifier.spage401
dc.identifier.urihttps://www.emerald.com/insight/content/doi/10.1108/IJIF-02-2019-0025/full/html
dc.identifier.urihttps://oarep.usim.edu.my/handle/123456789/10521
dc.identifier.volume12
dc.language.isoenen_US
dc.publisherEmerald Publishing Limiteden_US
dc.relation.ispartofISRA International Journal of Islamic Financeen_US
dc.subjectInternal control, Islamic financial institutions (IFIs), Sharīʿah governance, Sharīʿah risk, Sharīʿah audit, Sharīʿah non-compliant incomeen_US
dc.titleInternal control, risk and Sharīʿah non-compliant income in Islamic financial institutionsen_US
dc.typeArticleen_US
dspace.entity.typePublication
oairecerif.author.affiliationUniversiti Sains Islam Malaysia
oairecerif.author.affiliationUniversiti Sains Islam Malaysia
oairecerif.author.affiliationUniversiti Sains Islam Malaysia
oairecerif.author.affiliationUniversiti Sains Islam Malaysia
oairecerif.author.affiliationUniversiti Sains Islam Malaysia

Files

Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
Internal Control, Risk and Shari'ah Non-Compliant Income in Islamic Financial Institutions.pdf
Size:
233.24 KB
Format:
Adobe Portable Document Format
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download

Collections

Scopus