Issues and Challenges in Shariah Audit Practices in Malaysian Shariah-Based Sectors

This study aims to examine the current issues and challenges in implementing Shariah audit practices in several Shariah-based sectors in Malaysia, namely, Islamic financial sector, Islamic Capital Market (ICM), Islamic cooperative, public Shariah-based and Public Trust Entity (PTE). Furthermore, based on the findings, several future strategies are proposed to enhance Shariah audit practices. In this study, a series of Focus Group Discussions (FGD) was employed, and 124 participants from 76 Shariah-based institutions were involved through five FGD sessions. This study discovered that each Shariah-based sector has different issues and challenges in implementing Shariah audit practices due to the current Shariah governance and assurance practices in respective sectors. Thus, three main strategies were proposed that can be used to bring Shariah audit practices to another level for these Shariah-based sectors. This includes nurturing Shariah governance and assurance, developing specific Shariah audit scopes based on the uniqueness of each Shariah-based sector, and enhancing the professionalisation of Shariah auditors. Note that this study is considered a pioneering study in identifying the issues and challenges in implementing Shariah audit practices in various Shariah-based sectors. It also contributes by proposing the main strategies to enhance Shariah audit practices as a next step in the future.