Main Article Content
Abstract
Islamic financial institutions have unique characteristics that avoid interest-based transaction and operate in accordance with Shariah principles. Therefore, the governance mechanism is also different with conventional institutions. One of important component in the governance structure in Islamic financial institution is the existence Shariah Supervisory Board (SSB). Shariah govenrnance is the governance mechanism in Islamic financial institutions that involves the position of SSB as the guard of shariah compliance process. This paper is mainly discusses the implementation of Shariah govenrnance practices by Islamic banks in Malaysia. Malaysia is one of the countries that seriously develops Islamic banking governance structure and Shariah govenrnance mechanism. Thus, this paper will discuss several issues as follows: Firstly, the nature of Shariah governance and the roles of SSB members. Secondly, the Shariah Governance Framework in Malaysia. Thirdly, the practices of Shariah governance and auditing in Malaysia. Finally, this paper attempts to evaluate the Shariah governance practices by Islamic banks in Malaysia and describes some aspects that can be learnt from Malaysia.
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References
- AAOIFI. (2004). Accounting, Auditing and Governance Standards for Islamic Financial Institutions. Manama, Bahrain: Accounting and Auditing Organization for Islamic Financial Institutions.
- Abdallah, A. A. (n. d.). The role of Shariah supervisory boards in setting accounting policies in Islamic banks. Journal of Objective Studies, 129-142.
- Abdul-Rahman, A. A. (1998). Issues in corporate accountability and governance: an Islamic perspective. The American Journal of Islamic Social Sciences, 15(1), 55-69.
- Azhar, S.A. (n.d). Shariah compliant parameters reconsidered. Kuala Lumpur: INCIEF.Aziz, A. (2008, October/November). Asian regulator making headway. Islamic Finance Asia. http://www.islamicfinanceasia.com/2_Asian.php access: February 13, 2009
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- Besar, M. H. A. H., Sukor, M. E. A., Muthalib, N. A. & Gunawa, A. Y. (2009). The practice of Shariah review as undertaken by Islamic banking sector in Malaysia. International Review of Business Research Papers, 5(1), 294-306.
- BNM. (n. d.). Guidelines on the Governance of Shariah committee for the IslamicFinancial Institutions. http://www.bnm.gov.my/ access: February 13, 2009.
- Daoud, H. (1996). Sharia Control in Islamic Banks. Herndon, Virginia: International Institute of Islamic Thoughts.
- Farook, S. and Lanis, R. (2005). Banking on Islam? Determinants of corporate social responsibility.
- http://islamiccenter.kaau.edu.sa/7iecon/Ahdath/Con06/_pdf/Vol1/22%20Sayd%20Zubair%20Farook%20Banking%20on%20Islam.pdf access: August 3, 2008
- Grais, W. & Pellegrini, M. (2006). Corporate governance and Shariah compliance in institutions offering Islamic financial services. World Bank Policy Research Workin Paper 4054
- Hameed, S. (2008). The case for Islamic auditing. International Accountant, Issue 41, May 2008.
- Hameed, S. (2009). Accounting and auditing for Islamic financial institutions. Kuala Lumpur: IIUM Press.
- Karim, R. A. A. (1990). The independence of religious and external auditors: the case of Islamic banks. Accounting, Auditing, and Accountability Journal, Vol. 3, No. 3.
- Karim, R. A. A. (1999). Accounting in Islamic financial institutions. Accounting and Business Magazines, July/Agustus 1999.
- Kasim, N., Mohamad, I. S. H., and Sulaiman, M. (2009). Shariah auditing in Islamic financial institutions: exploring the gap between the “desired” and the “actual”. Global Economy and Finance Journal, 2(2), 127–137.
- Maali, B., Casson, P., and Napier, C. (2006). Social reporting by Islamic banks. ABACUS, 42(2), 266 – 289.
- Malaysian Islamic Banking Act 1983.
- Wouters, P. (2008). Islamic banking in Turkey, Indonesia and Pakistan: a comparison with Malaysia.
- http://www.dinarstandard.com/finance/IFComparison030308.htm access: February 13, 2009.
- Zurina Shafii, Z., Nor Aishah, M. A., Kasim, N. (2014). Shariah audit in Islamic banks: an insight to the future Shariah auditor labour market in Malaysia. Procedia - Social and Behavioral Sciences, 145, 158 – 172.
References
AAOIFI. (2004). Accounting, Auditing and Governance Standards for Islamic Financial Institutions. Manama, Bahrain: Accounting and Auditing Organization for Islamic Financial Institutions.
Abdallah, A. A. (n. d.). The role of Shariah supervisory boards in setting accounting policies in Islamic banks. Journal of Objective Studies, 129-142.
Abdul-Rahman, A. A. (1998). Issues in corporate accountability and governance: an Islamic perspective. The American Journal of Islamic Social Sciences, 15(1), 55-69.
Azhar, S.A. (n.d). Shariah compliant parameters reconsidered. Kuala Lumpur: INCIEF.Aziz, A. (2008, October/November). Asian regulator making headway. Islamic Finance Asia. http://www.islamicfinanceasia.com/2_Asian.php access: February 13, 2009
Bank Negara Malaysia. (2011). Shariah Governance Framework for Islamic Financial Institutions. http://www.bnm.gov.my/guidelines/05_Shariah/02_Shariah_Governance_Framework_20101026.pdf access: November 30, 2015.
Besar, M. H. A. H., Sukor, M. E. A., Muthalib, N. A. & Gunawa, A. Y. (2009). The practice of Shariah review as undertaken by Islamic banking sector in Malaysia. International Review of Business Research Papers, 5(1), 294-306.
BNM. (n. d.). Guidelines on the Governance of Shariah committee for the IslamicFinancial Institutions. http://www.bnm.gov.my/ access: February 13, 2009.
Daoud, H. (1996). Sharia Control in Islamic Banks. Herndon, Virginia: International Institute of Islamic Thoughts.
Farook, S. and Lanis, R. (2005). Banking on Islam? Determinants of corporate social responsibility.
http://islamiccenter.kaau.edu.sa/7iecon/Ahdath/Con06/_pdf/Vol1/22%20Sayd%20Zubair%20Farook%20Banking%20on%20Islam.pdf access: August 3, 2008
Grais, W. & Pellegrini, M. (2006). Corporate governance and Shariah compliance in institutions offering Islamic financial services. World Bank Policy Research Workin Paper 4054
Hameed, S. (2008). The case for Islamic auditing. International Accountant, Issue 41, May 2008.
Hameed, S. (2009). Accounting and auditing for Islamic financial institutions. Kuala Lumpur: IIUM Press.
Karim, R. A. A. (1990). The independence of religious and external auditors: the case of Islamic banks. Accounting, Auditing, and Accountability Journal, Vol. 3, No. 3.
Karim, R. A. A. (1999). Accounting in Islamic financial institutions. Accounting and Business Magazines, July/Agustus 1999.
Kasim, N., Mohamad, I. S. H., and Sulaiman, M. (2009). Shariah auditing in Islamic financial institutions: exploring the gap between the “desired” and the “actual”. Global Economy and Finance Journal, 2(2), 127–137.
Maali, B., Casson, P., and Napier, C. (2006). Social reporting by Islamic banks. ABACUS, 42(2), 266 – 289.
Malaysian Islamic Banking Act 1983.
Wouters, P. (2008). Islamic banking in Turkey, Indonesia and Pakistan: a comparison with Malaysia.
http://www.dinarstandard.com/finance/IFComparison030308.htm access: February 13, 2009.
Zurina Shafii, Z., Nor Aishah, M. A., Kasim, N. (2014). Shariah audit in Islamic banks: an insight to the future Shariah auditor labour market in Malaysia. Procedia - Social and Behavioral Sciences, 145, 158 – 172.