Islamic auditing: principles, success drivers, challenges, and future direction – a systematic literature review

Abstract

The globalization of auditing makes it one of the most relevant economic developments of the modern age. Auditing provides systems of accountability and transparency, ensuring an organization’s integrity. Conventional auditing relies heavily on financial reporting, compliance, and standards-based auditing. In contrast, Islamic auditing incorporates ethics, social responsibility, and the religious dimension of Shariah. This study examines available theories, empirical work, and research gaps in Islamic auditing, particularly the holistic accountability framework based on the concepts of amanah, hisab, and ihsan. Using qualitative content analysis, the study assesses Islamic auditing and the obstacles it faces, drawing on the Quran, Hadith, literature, books, and reports from different entities. Islamic auditing supports transparency, ethical and governance compliance, and social justice in Islamic financial institutions. However, several challenges – including a lack of Shariah auditors, independence of the auditors, and Shariah-based, non-standardized auditing frameworks – inhibit Islamic auditing. This study argues that Islamic auditing would be more effective if it embraced modern auditing techniques and incorporated multidisciplinary approaches.