Determinants of offectivness od internal audit: a case study od palestinaian islamic banks
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Date
2025-10-05
Authors
Thabet Mohammad Mari
Journal Title
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Publisher
جامعة النجاح الوطنية
Abstract
Islamic banking institutions have become an integral part of the global financial system, providing Sharia-compliant financial alternatives that meet the needs of customers seeking to avoid interest-based and prohibited transactions. In Palestine, the effectiveness of internal Sharia auditing plays a crucial role in ensuring compliance with Sharia principles and enhancing governance in Islamic banks. This study aims to examine the determinants of the effectiveness of internal Sharia auditing in Palestinian Islamic banks, and whether there are any obstacles or challenges facing it, focusing on three key factors: independence, efficiency, and performance.
This study employed a two-stage sequential interpretive approach (a mixed methodology), combining both qualitative and quantitative methods to ensure the comprehensiveness and depth of its conclusions, while simultaneously collecting qualitative and quantitative data. Our methodology is divided into two phases: a quantitative survey of employees in Sharia audit departments and Sharia supervisory boards, and in-depth qualitative interviews with a number of experts involved in the Sharia audit process of Palestinian Islamic banks.
The results reveal that the three traditional factors the study focused on are insufficient without "senior management support" and a "clear governance framework." The results also showed that independence emerged as the most significant factor influencing effectiveness. Regarding competence, the results indicated that effectiveness requires the auditor to be knowledgeable in both financial and legal aspects, not just one. As for performance, effectiveness necessitates a shift from traditional manual methods to systematic, documented, and technologically supported practices.
In light of these findings, the study recommends strengthening independence mechanisms by imposing functional immunity on the Sharia auditor, enhancing the performance and efficiency of auditors through continuous professional development, integrating technology into Sharia auditing, and expanding the scope of future research specializing in Sharia auditing.