The Extent of Compliance of Banks’ Sharia Supervisory Board Reports with the Requirements of Governance Standard No. (1) Issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)
DOI:
https://doi.org/10.54172/75arg404Keywords:
Sharia Supervisory Boards Reports, Sharia Governance, Sharia Supervision, Islamic Financial Institutions, Sharia Supervisory BoardsAbstract
This study examined the extent to which the Sharia Supervisory Board (SSB) reports of the United Bank for Commerce and Investment, Al-Saray Bank for Commerce and Investment, and Al-Yaqeen Bank complied with the requirements of Governance Standard No. (1) issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The study adopted a descriptive research approach and analyzed data collected from SSB reports published within the annual financial statements of the selected banks during 2020–2024. The reports were evaluated using an unweighted binary variable content analysis technique. The findings revealed that the examined banks demonstrated good to high compliance with the requirements of Sharia Governance Standard No. (1). The reports reflected noticeable efforts to follow the prescribed reporting structure and disclosure requirements, although some deficiencies remained in specific disclosure items. Accordingly, the study recommends enhancing disclosures in SSB reports by providing evidence-based examination procedures for banking transactions, clarifying profit distribution and loss allocation mechanisms, documenting members’ signatures, and explicitly disclosing unlawful gains or Sharia violations to ensure stronger alignment with AAOIFI standards. These improvements would strengthen transparency, increase stakeholder confidence, enhance accountability practices, and support greater consistency in Sharia governance reporting among Islamic banks in Libya's banking sector
References
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In English:
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