A QUALITATIVE ANALYSIS OF THE EFFECTIVENESS OF SHARIA AUDIT IN REDUCING COMPLIANCE RISK IN INDONESIAN ISLAMIC COMMERCIAL BANKS

Abstract

This study is motivated by the high level of compliance risk in the operations of Islamic banks, which has the potential to cause violations of Sharia principles and reduce public trust. The focus of this study is the effectiveness of Sharia audit in reducing compliance risk. The research question is directed at examining the extent of the role of Sharia audit and the factors influencing its effectiveness. This study employs a descriptive qualitative approach with data collection techniques through literature review sourced from scientific journals, regulations, and related documents. The results show that Sharia audit plays an effective role in minimizing compliance risk through the implementation of risk-based auditing, strengthening internal control systems, and synergy between internal auditors and the Sharia Supervisory Board. However, the effectiveness of Sharia audit is still influenced by limited human resources, the complexity of Islamic financial products, and the lack of standardized audit frameworks.