Shariah governance and audit practices in Islamic co-operatives: An audit expectation-performance gap analysis
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Supiah Salleh 
, Muhammad Iqmal Hisham Kamaruddin , Zurina Shafii , Mustafa Mohd Hanefah , Nurazalia Zakaria , Wan A’tirah Mahyudin , Nur Amni Mahmud Sabri
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This study focuses on the inclusion of Shariah governance and audit best practices in Islamic co-operatives in Malaysia. The development of Shariah governance and audit is essential to complement the Shariah compliance mechanisms already in place and practiced internally within these Islamic co-operatives. Strong regulations, frameworks, and guidelines are needed to uphold Shariah compliance practices. The Delphi method was used as the study’s methodology, involving a series of discussions with industry practitioners in Islamic co-operatives. Based on the findings, there is an existing expectation-performance gap in regulations, frameworks, and guidelines; independence and competency; and Shariah audit scope in governing Shariah compliance principles in Islamic co-operatives. This is crucial because well-developed regulations, frameworks, and guidelines in Shariah governance and audit will increase stakeholders’ trust that the activities and operations of Islamic co-operatives are Shariah-compliant. Additionally, providing a standardized framework will help manage risks in Islamic co-operatives and, in the broader context, contribute to the industry’s and the economy’s growth by offering stakeholders adequate information to make informed decisions.
Keywords: Shariah Audit, Shariah Governance, Islamic Co-Operatives, Expectation Gap, Performance Gap
Authors’ individual contribution: Conceptualization — S.S.; Investigation — N.A.M.S.; Writing — M.I.H.K.; Supervision — Z.S. and M.M.H.; Project Administration — N.Z. and W.A.M.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: M40, M41
Received: 03.05.2024
Accepted: 08.10.2024
Published online: 11.10.2024
How to cite this paper: Salleh, S., Kamaruddin, M. I. H., Shafii, Z., Hanefah, M. M., Zakaria, N., Mahyudin, W. A., & Sabri, N. A. M. (2024). Shariah governance and audit practices in Islamic co-operatives: An audit expectation-performance gap analysis. Corporate Law & Governance Review, 6(3), 72–80. https://doi.org/10.22495/clgrv6i3p8
