ADVISORY COMMITTEE OF EXPERTS (ACE) AND INTERNAL SHARI’AH AUDITORS’ CHARACTERISTICS ON INTERNAL SHARI’AH AUDIT EFFECTIVENESS OF NON-INTEREST FINANCIAL INSTITUTIONS IN NIGERIA

Abstract

The study examined the effect of Advisory Committee of Experts (ACE) and internal shari’ah
auditors’ characteristics on the internal shari’ah audit effectiveness of non-interest financial
institutions in Nigeria. The study adopted a survey research approach which assumes positivist
paradigm. A self-administered questionnaire was used to collect data from 35 shari’ah auditors of
the 4 full-fledged non-interest banks and 4 Islamic insurance firms (takaful operators) in Nigeria.
These data were analyzed with multiple regression using Partial Least Square Structural Equation
Model (SmartPls 4). The results of the findings shows that internal shari’ah auditors’ competence
and advisory committee of expert have positive significant effect on internal shari’ah audit
effectiveness while internal shari’ah auditors’ independence has an insignificant positive effect on
internal shari’ah audit effectiveness. The study therefore recommended that the management of
the banks should make an effort to adhere to Accounting and Auditing Organization for Islamic
Financial Institutions (AAOIFI) guidelines regarding the appointment process based on
qualifications and competence, which explicitly state that the internal Shariah auditor must be free
from improper management influence and maintain a high degree of independence to preserve the
trust of users who rely on their report.