Shariah Audit for Islamic Finance Industry in Revolution Industry 4.0: A Part of Religious Confession

Abdurrahman Haqqi

2019

Abstract

A key component of Revolution Industry 4.0 is the internet which is characterized by connected devices. Not only does this help internal operations, but through the use of the cloud environment where data is stored, equipment and operations can be optimized by leveraging the insights of others using the same equipment or to allow smaller enterprises access to technology they wouldn’t be able to on their own. Shariah auditing has a key importance as there is a growing awareness among Islamic institutions that every such institution should contribute towards achieving Maq’asid Al-Shariah or the objectives of the Islamic law. It is suggested that there is a need to have regular independent Shariah audits in IFIs as people are now experiencing a movement along a continuum from a society that trusts everything and audits nothing to a society that trusts nothing and audits everything. The concept of Shariah Auditing should be extended to the activities relating to among others, the system, the products, the employees, the environment and the society. Confession is a specific form of testimony, involving oneself and it is used as a form of proof in judicial matters. Confession has been recognized as a source of conclusive proof of a right and a crime by Islamic textual sources. There are accusations that Islamic financial industry doesn’t Shariah-compliance. By the existence of Shariah audit in the industry it will prove the industry that it is in the real track of Islamic teaching. The paper uses qualitative approach, desk-research study in which it uses the existing literature. At the end, the research found that the industry still minimizes the Shariah auditing role though it is a confession proof as required in Islamic teachings. Among the objectives and aims of this paper are: (1) To understand the importance of Shariah compliance and Shariah governance in Islamic banking and comprehend Shariah audit, (2) To analyze the Shariah audit area in facing Revolution Industry 4.0, (3) To relate the importance of Shariah audit in Islamic Financial Institutions to admission as proof that IFIs are Shariah-compliance. The methodology followed in this study is mainly of library work, basically it was based on related literatures written in conventional and Islamic perspective. Some information is taken from the practitioners’ of many organizations through a primary data collection. The paper found that Shariah audit is considered as a confession to defense the allegation that IFIs are not in accordance with Islamic teachings.

Paper Citation

in Harvard Style

Haqqi A. (2019). Shariah Audit for Islamic Finance Industry in Revolution Industry 4.0: A Part of Religious Confession. In Proceedings of the 7th ASEAN Universities International Conference on Islamic Finance - Volume 1: 7th AICIF, ISBN 978-989-758-473-2, pages 90-101. DOI: 10.5220/0010115300002898

in Bibtex Style

@conference{7th aicif19,
author={Abdurrahman Haqqi},
title={Shariah Audit for Islamic Finance Industry in Revolution Industry 4.0: A Part of Religious Confession},
booktitle={Proceedings of the 7th ASEAN Universities International Conference on Islamic Finance - Volume 1: 7th AICIF,},
year={2019},
pages={90-101},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010115300002898},
isbn={978-989-758-473-2},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 7th ASEAN Universities International Conference on Islamic Finance - Volume 1: 7th AICIF,
TI - Shariah Audit for Islamic Finance Industry in Revolution Industry 4.0: A Part of Religious Confession
SN - 978-989-758-473-2
AU - Haqqi A.
PY - 2019
SP - 90
EP - 101
DO - 10.5220/0010115300002898