Khairul Mukminin

This paper attempts to reconstruct and achieve learning from the mega financial crime that occurred at Dubai Islamic Bank (DIB) during the global crisis and juxtapose it with fraudulent practices from a global perspective with the aim to acquire a broader knowledge on fraud, especially in shariah-based organizations. Thus, this paper could conceivably contribute to the rarely covered topic concerning financial crimes within Islamic organizations. Additionally, descriptive, comparative, and analytical research are exerted in this study. As for the findings, the scandal divulged that the significant power of the government exercised through mandating faith-based banking and acquiring major shareholding does not seem to prevent white-collar frauds much to the outrage of civilized lawmakers. This implies that just like its conventional counterpart, Islamic banking is not immune to fraud. In addition, the paper highlights that the most offensive misconducts found in the case are: i) the ...

This paper aims to achieve enlightenment from Maqasid shariah in terms of profit maximization within Islamic banking. Therein the study conducting library-based approach for every single data obtained by virtues of books, articles, and other scholastic literatures and additionally different supporting approaches, namely Islamic jurisprudence, regulatory framework, accounting, and risk are engaged in this paper to exhibit more substantial apologia as regard of the topic. In respect of finding, making the best use of resources to achieve profit maximization within the bounds of the maqasid should be believed as maximization of other fundamental independent-rights, inter alia, right of Allah (zakah) and right of state (taxation). Moreover, the profit generated ought to bring refinement not solely to strengthen the standing of nifs mal (preservation of wealth), but also to nurture whosoever Muslim person who successfully transforms its distress, time, and assets into financial gain. It is obvious that in shariah perspective specifically in the case of profit, nonetheless the right of Allah is the supreme, the right of human-being coming first after all worldly-obligations are adequately accomplished. Differently expressing, Maqasid al-shariah is a conception of precedence on how putting the best interest into the right time and the right place without inflicting suffering on the other interests with purpose that every single of interest could be on stage in the long run. For all practical purposes, this study call attention to the muslim public particularly by not losing sight of the fact apropos to the most fundamental of the maqasid principally in the circle of wealth namely, protection and establishment sequentially whereby IB should not be dictated to move with insistent haste by taking exhortations of greater distant of Maqasid provided by numerous contemporary Islamic scholars due to inherent nature of the bank per se. Through careful interpretation, this study encapsulates on how to derive and benefit from the maqasid by stages (protection, establishment, nurture) rather than in an instant manner.

This This paper attempts to reconstruct and achieve learning from the mega financial crime that occurred at Dubai Islamic Bank (DIB) during the global crisis and juxtapose it with fraudulent practices from a global perspective with the aim to acquire a broader knowledge on fraud, especially in shariah-based organizations. Thus, this paper could conceivably contribute to the rarely covered topic concerning financial crimes within Islamic organizations. Additionally, descriptive, comparative, and analytical research are exerted in this study. As for the findings, the scandal divulged that the significant power of the government exercised through mandating faith-based banking and acquiring major shareholding does not seem to prevent white-collar frauds much to the outrage of civilized lawmakers. This implies that just like its conventional counterpart, Islamic banking is not immune to fraud. In addition, the paper highlights that the most offensive misconducts found in the case are: i) the fraudulent activities were concealed or kept in secrecy; ii) there was a lack of 'shoulder to shoulder' knowledgeable people to oversee the risk and warning signs; and finally iii) the modus operandi employed was collaborating. Accordingly, the study refreshes and stresses to the influential characters involved, namely, respective regulators and top-level officials of the organization on the importance of robust, prudent, and sustainable practical conduct for they are the accredited people whose enforcement and in-company culture will distinguish the right from the wrong.

Purpose-It has been more than five decades since the concept of materiality is applied in the auditing practice. However, a unanimous method towards consistency is evidently a bridge too far. Thus, this paper aims to achieve enlightenment regarding the concept of materiality from the Islamic perspective. Design/methodology/approach-To achieve the research objectives of this study, the paper thoroughly conducts exploratory and documented research analysis. Thus, it may bring a fresh perspective on the development of the conceptual framework, theories and pragmatic matters. Findings-There are two essential thresholds upon a unanimous method of materiality within this study. First is the determination of trivial misstatement. Second is planning materiality. With regard to the former, stakeholders of Islamic financial institutions such as Islamic bank, government, auditor, and accountant should be mindful of practising materiality. In the most stringent point of view, the concept of materiality may be placed as a devaluation of Maqasid al Shariah in the level of wealth. Having said that, the Shariah might accommodate the materiality with certain size, degree, and agreement by virtues of gharar and luqathah. With regard to the latter, this study puts the zakat and/or the taxation forward as feasible financial indicators because the attentions of both involve the tenets of Maqasid of the Din and the established Maslahah.

This paper aims to achieve enlightenment from Maqasid shariah in terms of profit maximization within Islamic banking. Therein the study conducting library-based approach for every single data obtained by virtues of books, articles, and other scholastic literatures and additionally different supporting approaches, namely Islamic jurisprudence, regulatory framework, accounting, and risk are engaged in this paper to exhibit more substantial apologia as regard of the topic. In respect of finding, making the best use of resources to achieve profit maximization within the bounds of the maqasid should be believed as maximization of other fundamental independent-rights, inter alia, right of Allah (zakah) and right of state (taxation). Moreover, the profit generated ought to bring refinement not solely to strengthen the standing of nifs mal (preservation of wealth), but also to nurture whosoever muslim person who successfully transforms its distress, time, and assets into financial gain. It is obvious that in shariah perspective specifically in the case of profit, nonetheless the right of Allah is the supreme, the right of human-being coming first after all worldly-obligations are adequately accomplished. Differently expressing, Maqasid al-shariah is a conception of precedence on how putting the best interest into the right time and the right place without inflicting suffering on the other interests with purpose that every single of interest could be on stage in the long run. For all practical purposes, this study call attention to the muslim public particularly by not losing sight of the fact apropos to the most fundamental of the maqasid principally in the circle of wealth namely, protection and establishment sequentially whereby IB should not be dictated to move with insistent haste by taking exhortations of greater distant of Maqasid provided by numerous contemporary Islamic scholars due to inherent nature of the bank per se. Through careful interpretation, this study encapsulates on how to derive and benefit from the maqasid by stages (protection, establishment, nurture) rather than in an instant manner.

Purpose – This paper works toward governance framework for Takaful industry and would chiefly like to compare it between two different jurisdictions which are Malaysia and Indonesia with the objective that understanding of its current application could be drawn up.
Design/ Methodology/ Approach – This paper adopts qualitative approach by means of contemporary literature search. Published and accessible acts, rules, articles and books are referred for literature review and analysis of research’s findings.
Findings – This study substantiates shariah board that play vital roles in ascertainment of shariah in the presence of takaful in Indonesia is much more challenging compared to its neighbour country i.e. Malaysia whereby besides the regulation prescribed minimum number of shariah board could highly possible be seated by one sole member, the regulation also see the existence of the Indonesian SSB as ‘outsourcing elements’ or ‘external party’ that should prepare all of things concerning shariah compliancy under his own steam whereby whilst Malaysia’s regime explicitly stipulates four prearranged shariah-compliance functions under careful examination namely shariah review, shariah audit, shariah risk management control, and secretariat as well research function, in the event of Indonesia, these extra special functions are not directly expressed in the act.
Research Limitation – The comparative study is delimited into Takaful between the selected countries without making plans of juxtaposition for its conventional perspective. Moreover, the study merely display perspective from legal framework of
both countries. Thus, the view on how it is in fact being applied is disregarded.
Practical Implication – An advance understanding of governance’s functions as well as roles of its attributes presided over Takaful is expected could bring awareness, attention, and assurance not solely to existing major stakeholders but also to wide- reaching stakeholders.
Social Implication – This study provides recent information and radically deliver understanding of diverse guidelines of shariah governance which is concentrated on Takaful industry. Moreover, being knowledgeable about perspective of how governance enacted in the faith-based institution in the different states might bring fresh motion and remembrance concerning the essentiality of the governance.
Originality/ Value – It is worthwhile to strategize issues pertaining to instituting standardised and globalised shariah-basis governance in the atmosphere of Islamic Finance System over the globe from legal framework perspective.

— This This paper attempts to reconstruct and achieve learning from the mega financial crime that occurred at Dubai Islamic Bank (DIB) during the global crisis and juxtapose it with fraudulent practices from a global perspective with the aim to acquire a broader knowledge on fraud, especially in shariah-based organizations. Thus, this paper could conceivably contribute to the rarely covered topic concerning financial crimes within Islamic organizations. Additionally, descriptive, comparative, and analytical research are exerted in this study. As for the findings, the scandal divulged that the significant power of the government exercised through mandating faith-based banking and acquiring major shareholding does not seem to prevent white-collar frauds much to the outrage of civilized lawmakers. This implies that just like its conventional counterpart, Islamic banking is not immune to fraud. In addition, the paper highlights that the most offensive misconducts found in the case are: i) the fraudulent activities were concealed or kept in secrecy; ii) there was a lack of 'shoulder to shoulder' knowledgeable people to oversee the risk and warning signs; and finally iii) the modus operandi employed was collaborating. Accordingly, the study refreshes and stresses to the influential characters involved, namely, respective regulators and top-level officials of the organization on the importance of robust, prudent, and sustainable practical conduct for they are the accredited people whose enforcement and in-company culture will distinguish the right from the wrong.

Purposes – The focused objectives of this paper are to unfold a deliberation concerning frauds and thereafter extracting significant issue therein to strengthen instilling application of materiality from traditional practices with aim that this paper could visualize fresh conceptual as well as widely-accepted foundational framework of materiality from shariah outlook. Design/ Methodology/ Approach – Descriptive, comparative, and mathematical research are exerted.
Findings – AAOIFI on its conceptual framework, indeed, provides several guidelines to determine materiality which is unique by engaging Islamic approach such as the three level of shariah precedence (darruriyat, hajiyat, tahsiniyat). However, up to this moment in terms of providing consistency of materiality that could build a bridge especially between the users and auditors is a bridge too far. Undeniably, there is space to make further improvement. Additionally, this study reveals that it is highly possible to achieve a uniformity of the materiality while the employed general-principles could be derived from holistic value such as maqasid al-shariah and maslahah and eventually be accommodated under both moderate legal system i.e. shariah and regime in which an organization operating.
Research Limitations – The engaged object that would be involved in this study is Islamic banking and as the barometer of Islamic view, some elements originate from usul fiqh (Islamic Jurisprudence) and Qawa’id Fiqqhiyah (Shariah Maxim) would be engaged in. It is mindful that the author is unknowledgeable about Islamic Law and Jurisprudence thus future and further discussions to bring improvement in the robustness of IFIs is inevitable and expectable. Research Implications – Materiality which is the main concern of the study could become a guiding principle in several compasses namely shariah non-compliance risk events in the sphere of auditing of financial statements, compliance audit on organization structure, people, information and technology infrastructures.
Originality/ Value – As late as this paper published, the topic of materiality from shariah perspective is few and far between. The one and only publication which a bit farther deliberate the matter is AAOIFI. Expressly speaking, this study would grasp and refresh shariah minds on underlying points of traditional practice i.e. both accounting and auditing standard which continuously and radically deal with the application of materiality.
Keywords – Materiality, Auditing, Accounting, Fraud, Shariah