Competency of Shariah Auditors in Malaysia: Issues and Challenges

Authors

  • Nor Aishah Mohd Ali Universiti Teknologi Mara, Malacca Campus, Malacca, Malaysia
  • Zakiah Muhammadun Mohamed Universiti Kebangsaan Malaysia, Bangi, Malaysia
  • Shahida Shahimi Universiti Kebangsaan Malaysia, Bangi, Malaysia
  • Zurina Shafii Universiti Sains Islam Malaysia, Nilai, Malaysia

Abstract

Over the last decade since the inception of the first Islamic bank in Malaysia in 1983, Malaysia saw an increasing demand for Islamic banking services from consumers.  Whilst the need for highly trained and skilled manpower in the Islamic banking industry is well established, the main challenge is really a mismatch of talent pool between what is required by the banks and what is offered by the market. Thus, this paper argues for a competency framework for shariah auditors in Malaysia. Prior research reveals that the competency requirements for shariah auditors were still not developed even though there is a need for it. A more recent empirical study reveals that most shariah auditors are either trained in shariah or auditing discipline. There is indeed an urgent need to draft the competency requirements which will include the knowledge, skills and other characteristics (KSOC) requirements to ensure adequate supply of competent shariah auditors to meet the expanding market demand. This paper proposes a new KSOC model as a basis for competency framework for shariah auditors that can uphold their effective functioning in our Islamic banking system.

Downloads

Download data is not yet available.

References

Abdul Rahman, A.R. (2008). Shari’ah Audit for Islamic Financial Services: The needs and challenges. In ISRA Islamic Financial Seminar (IIFS), 1-14.

Abdul Rahman, Z. (2006). How Islamic Banks complying with the Shariah requirements. NST Business Times. 19 July 2006.

Bank Negara Malaysia (BNM). (2010). Shariah Governance Framework. 1-48. Retrieved from http://www.bnm.gov.my on 1 September 2013.

Bernama. (2014). Malaysia’s International Islamic Banking Assets to Hit US$390 Billion by 208: E & Y Report. 6 January 2014. Retrieved from http://www.bernama.com on 1 April 2014.

Boyatzis, R.E. (2009). Competencies as a behavioral approach to emotional intelligence. Journal of Management Development, 28(9), 749-770.

Burnaby, P. & Hass, S. (2009). A summary of the global Common Body of Knowledge 2006 (CBOK) study in internal auditing. Managerial Auditing Journal, 24(9), 813-834.

Centre for Research and Training (CERT). 2014. Retrieved from http://www.cert.com.my on 1 April 2014.

Cheng, Y.-S., Liu, Y.-P., & Chien, C.-Y. (2009). The association between auditor quality and human capital. Managerial Auditing Journal, 24(6), 523–541.

Department of Statistics Malaysia. 2014. Population and Demographic. Retrieved from http://www.statistics.gov on 1 April 2014.

Dewa, N. & Zakaria, S. (2012). Training and Development of Human Capital in Islamic Banking Industry. Journal of Islamic Economics, Banking and Finance, 8(1), 95-108.

Drejer, A. (2001). How can we define and understand competencies and their development? Technovation, 21(3), 135–146.

Eilifsen, A., Messier, W.F., Glover, S.M & Prawitt, D.F. (2011). Auditing and Assurance Services, 2nd Edition, UK edition.

El Razik, A.A. (2009). Challenges of IFRS in the Islamic Accounting World: Case of Middle Eastern Countries. Scientific Bulletin-Eco Sciences, 8(14), 1-5.

Hassan, Z. (2010). Regulatory Framework of Shari’ah Governance System in Malaysia, GCC Countries and the UK. Kyoto Bulletin of Islamic Area Studies, 2(March), 82-115.

Heilmann, P. (2007). High level competence: a tool for coping with organizational change. Journal of European Industrial Training, 31(9), 727-741.

Hoffman, M.H.W., Hampe, M. & Mueller, G. (2010). Knowledge, Skills and Competences Descriptors for Engineering Education. In Education Engineering 2010 – The Future of Global Learning Engineering Education, 639-345.

Hoffman, T., Consulting, T.H. & Waverly, M. (1999). The meanings of competency. Journal of European Industrial Training. 23(6), 275-285.

Hussain, G.R. & Parker, D.L. (n.d). Audit and Governance in Islamic Banks: Selection and training of Shariah Advisors. Retrieved from http://www.apira2010.econ.usyd.edu.au.

Institute of Banking and Financial Institution (IBFIM). 2014. Retrieved from http://www.ibfim.com on 1 April 2014.

International Centre for Research and Training (CERT). 2014. Retrieved from http://www.inceif.org on 1 April 2014.

International Federation of Accountants (IFAC). 2014. IES 2 Initial Professional Development – Technical Competent (Revised). Retrieved from http://www.ifac.org/publications-resourceson 1 April 2014.

International Federation of Accountants (IFAC). 2014. IES 3 Initial Professional Development – Professional Skills (Revised). Retrieved from http://www.ifac.org/publications-resourceson 1 April 2014.

International Federation of Accountants (IFAC). 2014. IES 4 Initial Professional Development – Professional Values, Ethics and Attitudes (Revised). Retrieved from http://www.ifac.org/publications-resourceson 1 April 2014.

Kasim, N. & Mohd Sanusi, Z. (2013). Emerging issues in Islamic Financial Institutions: Empirical Evidence from Malaysia. Journal of Business and Management, 8(5), 10-17.

Lahsasna, A. (2013). Maqasid Al-Shariah in Islamic Finance. Kuala Lumpur. IBFIM. 352.

Laldin, M.A. (2011). Overview of Shari’ah Governance in Malaysia and Globally.In International Shariah Audit Conference & Workshop. 9 May 2011, 1-24.

Mahzan, N. & Yahya, Y. (2014). Syariah Audit Practices in Malaysian Islamic Financial Institutions (IFIs). In National Symposium and Exhibition on Business and Accounting 2014 (NSEBA) 19 March 2014, 1-9.

Mohamed Sultan, S.A. (2007). A Mini Guide to Shariah Audit for Islamic Financial Institutions – A Primer. Kuala Lumpur. CERT Publication. 153.

Mustafa Kamil, B.A. & Che Mohd Salleh, M. (2013). The need for effectiveness talent management practices among Islamic Financial Institutions in Malaysia. In 4th International Conference on Business and Economic Research (4th ICBER 2013) Proceedings. 296-305.

Natt, A., Al-Habshi, O. & Zainal, M.P. (2009). A proposed framework for human capital development in the Islamic Financial Services industry. The Journal of Knowledge Economy & Knowledge Management, 1, 9-26.

Popper, N. (2013). Islamic Banks, stuffed with cash, explore partnership in West. The New York Times. 26 December 2013.

Pickett, S. (2000). Developing internal audit competencies. Managerial Auditing Journal, 15(6). 265-278.

Price Waterhouse Cooper (PwC). (2011). Shariah Audit Issues and Considerations Shariah Audit as part of Shariah Governance Framework. PwC Report.

RedMoney Training (RedMoney). 2014. Retrieved from http://www.redmoneytraining.com on 1 April 2014.

Shafii, Z., Salleh, S. & Shahwan, S. (2010). Management of Shariah Non-Compliance Audit Risk in the Islamic Financial Institution via the Development of Shariah Compliance Audit Framework and Shariah Audit Programme. Kyoto Bulletin of Islamic Area Studies, 3(2), 3-16.

The Institute of Internal Auditors Research Foundation (IIARF). (2010). Core Competencies for Today’s Internal Auditor – The IIA’s Global Internal Audit Survey-A component of the CBOK study. The IIARF. 86.

The Institute of Internal Auditors Research Foundation (IIARF). (2013). Value and Competency: The Stakeholder Perspective. The IIARF. 96.

Woodruffe, C. (1992). What is meant by competency? Leadership & Organization Development Journal, 14(1), 29-36.

Yaacob, H.& Donglah, N.K. (2012). Shari’ah Audit in Islamic Financial Institutions: The Postgraduates’ Perspective. International Journal of Economics and Finance, 4(12), 224–239.

Downloads

Published

2015-05-31

How to Cite

Ali, N. A. M., Mohamed, Z. M., Shahimi, S., & Shafii, Z. (2015). Competency of Shariah Auditors in Malaysia: Issues and Challenges. Journal of Islamic Finance, 4(1), 22–30. Retrieved from https://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/67

Issue

Section

Articles