Internal sharia’h auditors’ competence, independence, reporting requirements and sharia’h audit effectiveness of non-interest financial institutions in Nigeria

Abstract

The study examined the effect of internal shari’ah auditors’ competence, independence and reporting requirements on the internal shari’ah audit effectiveness of Islamic (Non-interest) financial institutions in Nigeria. The study adopted a cross-sectional survey research design which assumes positivist paradigm. A self-administered questionnaire was used to collect data from 35 shari’ah auditors of the four (4) full-fledged non-interest bank (NIBs) and four (4) takaful operators in Nigeria, analyzed with multiple regression using Partial Least Square Structural Equation Model (PLS-SEM). The results of the findings shows that internal shari’ah auditors’ independence and internal shari’ah audit reporting requirement have positive significant effect on internal shari’ah audit effectiveness while internal shari’ah auditors’ competence has positive non-significant effect on internal shari’ah audit effectiveness. The study therefore recommended that the bank management should follow AAOIFI guidelines for appointment of internal Shariah auditors, ensuring competence, qualification, and independence to maintain user confidence and maintain independence.