Sri Sulistyowati¹, Dalila Daud^2* and Eley Suzana Kasim²

¹Faculty of Islamic Business and Economics, Universitas Islam Sultan Agung (Unisula) Semarang,
PhD Student of Accounting Research Institute (ARI), UiTM Malaysia
²Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Negeri Sembilan, Negeri Sembilan, Malaysia and
Accounting Research Institute, Universiti Teknologi MARA, Shah Alam, Malaysia

ABSTRACT

This study examines the competency and independence of internal Shariah auditors (ISAs) in Indonesian Islamic banks by identifying gaps between regulation and practice and assessing the implications of ISAs’ emerging advisory role. Using a qualitative design, we conducted 14 semi-structured interviews with auditors and governance stakeholders and triangulated the evidence with audit charters and key regulations (POJK 1/2019; POJK 2/2024; SEOJK 15/2024; BI Reg. 11/33). Thematic analysis shows that ISA competence is constrained by uneven enforcement of certification and limited Shariah-specific training, while expectations for multidisciplinary capabilities are rising. Independence is widely recognised in principle but weakened in practice by reporting lines to executive management, with Audit Committees dominating oversight and Shariah Supervisory Boards (SSBs) remaining peripheral. We also find a shift toward advisory work that, without clear safeguards, can blur assurance boundaries and erode credibility. The study proposes a competency matrix and an independence architecture for ISAs, recommending clearer Shariah certification pathways, stronger SSB involvement in reporting structures, and safeguards such as rotation and conflict-of-interest rules to protect independence while enabling value-adding advisory contributions.

Keywords: Internal Shariah audit; competency; independence; Shariah governance; Islamic banks; Indonesia