Student Name

Muhammad UmarFollow


Master of Science in Islamic Banking & Finance


Department of Finance

Faculty/ School

School of Business Studies (SBS)

Date of Submission

Spring 2024


Dr. Adnan Haider, Professor of Business Economic and Analytics -SBS Department: Finance


Islamic financial Institutions, Shariah Audit, Shariah Governance, Internal Shariah Audit


Professional auditors are required to ensure that Islamic Financial Institutions (IFIs) complies with Shariah principles to serve the IFI's stakeholders. Different set of knowledge, skills and abilities required to do their job effectively. However, the lack of competency and skills required by Shariah auditors to conduct Shariah audits is one of the problems for Islamic financial institutions in Pakistan. This paper aims to identify the Knowledge and skill requirements of Shariah auditors.

Design /methodology /approach

A qualitative approach using an open-ended survey questionnaire was used. In total 20 respondents consist of the Head of Shariah audit (Head SA) and Manager / officer Shariah Audit from two types of banking institutions. Separately discuss the responses of Head Shariah audit because they the key responses of this study.


The widespread absence of AAOIFI certifications and pertinent audit qualifications among Shariah auditors highlights an urgent requirement for improved professional training programs in the Islamic finance sector. Moreover, the general agreement regarding the insufficient expertise of Shariah auditors in fundamental banking IT systems emphasizes the critical need to close the technological knowledge gap. This is essential for establishing strong and effective Shariah auditing procedures in today’s digital age. There is a clear agreement among participants on the insufficiency of Shariah auditors’ understanding of core banking IT systems, pointing to a considerable gap in the necessary skills for competent Shariah auditing. Additionally, the survey participants pinpointed critical areas where skill development is needed, highlighting the urgency for enhanced capabilities in Shariah principles, product restructuring, and technical analysis.

Practical implications

This study may prove a valuable addition to the existing literature. Further, the findings of this study may help to improve Knowledge & Skills of Shariah auditors in Islamic Banking Institutions which in turn may cater to avoid the loss of faith, penalties from regulator, reducing returns / growth and hindering the development / innovation.


This research is a useful contribution to the Islamic finance literature and shows that Shariah audit function is a major concern for Islamic finance institutions in Pakistan. Therefore, IFIs in xi Pakistan needs competent, intellectual and skilled auditors who have a good understanding of Shariah, auditing, core IT system and banking regulations issued by SBP.

Document Type

Restricted Access

Submission Type

Research Project

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