Challenges of Shariah Audit In Nigeria

Shariah audit serves as an important governance mechanism within the Shariah governance system of Islamic banks. Its implementation remains challenging as it gives rise to the issue of dispute in its scope and the level of Shariah compliance with the practices and principles of Islamic banking. The Islamic Bank in Nigeria has witnessed a gradual growth with four full-fledged and a window Islamic bank. Key challenges undermining its efficacy in Nigeria are unclear frameworks, inadequate infrastructure, shortage of skilled personnel and inconsistent regulations. This research seeks to explore and address challenges facing in Shariah audit in Islamic banks in Nigeria. The aim of this paper is analyse the issues Shariah auditors encountered in Nigeria Islamic banks. This study adopts a qualitative methodology using focus group discussions of Shariah auditors form Islamic banks, regulators, and retired regulators officials. Findings from this study reveal significant gaps in the adoption and implementation of Shariah audit practices, including regulatory inconsistencies, limited technological integration, and a lack of clarity in operational guidelines. The research highlights the urgent need for a domesticated Shariah audit framework tailored to the Nigerian context, drawing lessons from global best practices while addressing local challenges.

Shariah audit serves as an important governance mechanism within the Shariah governance system of Islamic banks. Its implementation remains challenging as it gives rise to the issue of dispute in its scope and the level of Shariah compliance with the practices and principles of Islamic banking. The Islamic Bank in Nigeria has witnessed a gradual growth with four full-fledged and a window Islamic bank. Key challenges undermining its efficacy in Nigeria are unclear frameworks, inadequate infrastructure, shortage of skilled personnel and inconsistent regulations. This research seeks to explore and address challenges facing in Shariah audit in Islamic banks in Nigeria. The aim of this paper is analyse the issues Shariah auditors encountered in Nigeria Islamic banks. This study adopts a qualitative methodology using focus group discussions of Shariah auditors form Islamic banks, regulators, and retired regulators officials. Findings from this study reveal significant gaps in the adoption and implementation of Shariah audit practices, including regulatory inconsistencies, limited technological integration, and a lack of clarity in operational guidelines. The research highlights the urgent need for a domesticated Shariah audit framework tailored to the Nigerian context, drawing lessons from global best practices while addressing local challenges.