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This paper aims to examine the effect of external Sharia audit on the performance of Islamic banks in Bahrain and Oman, which are countries that implement it. This study aims to explore the role of external Sharia audit in preventing prohibited profits and mitigating the risks of noncompliance with Sharia principles.

This paper opted a quantitative approach and collected data from the employees of the Sharia Supervision Board & Sharia Audit in the Islamic banks. This paper studied how external Sharia audit affects the financial profitability and compliance with Islamic Sharia principles of Islamic banks, using partial least squares structural equation modeling technique.

The results indicated that external Sharia audit had a significant positive effect on both financial profitability and compliance with Islamic Sharia principles in the Islamic banks under study. This means that external Sharia audit enhances the financial performance and the adherence to Islamic Sharia principles of the Islamic banks.

This study has some limitations that suggest directions for future research, such as expanding the sample to other countries and measuring more performance indicators for Islamic banks.

This study suggests that external Sharia audit enhances the performance and compliance of Islamic banks and urges the regulators to adopt it and standardize it.

This study contributes to the literature on Islamic finance and external Sharia audit by providing empirical evidence on the impact of external Sharia audit on the performance of Islamic banks.

The purpose of this study is to measure the technical efficiency of 20 Algerian insurance companies from 2016 to 2020, by using slacks-based measure (slacks-based measure [SBM] data envelopment analysis [DEA]) model. This research aims to provide a comprehensive assessment of this companies' efficiency, taking into account both the desirable and undesirable outputs.

The study uses a nonoriented, SBM model with the assumption of constant returns to scale to estimate the technical efficiency of commercial insurance companies over a five-year period. The inputs used are labor expense, agent expense and investments, while the outputs included are gross premiums and investment income as desirable outputs and gross claims as undesirable output.

Among 20 insurance companies evaluated, only 5 companies consistently achieved technical efficiency during the study period (Caisse Nationale de Mutualité Agricole [CNMA], MACIR, CARDIF, MUTUALISTE and AGLIC); so they represent the best practices in the Algerian insurance sector, with overall average of the technical efficiency is 81%. However, the reference sets analysis showed that CNMA and AGLIC had high robustness. Also, the results demonstrate the impact of ignoring the undesirable outputs on the accuracy of the assessment.

The sample of the study consists of the active insurance companies in Algeria, based on the Annual Insurance Reports of Algeria; there are 20 companies as shown in the table. The data are taken from the annual reports of insurance companies during the 2020 period, issued by the Algerian Ministry of Finance.

The challenge for insurance company is how to find a balance between reducing claims paid and simultaneously improving the quality of insurance services. In fact, it is observed that studies evaluating their efficiency ignore claims in the analysis process. Therefore, the study highlights the importance of considering undesirable outputs within the DEA framework; this allows for a more accurate assessment of the company's performance and helps in improvement. Furthermore, although the insurance sector plays a crucial role, it has not received enough research attention compared to other financial sectors, especially in Arab and developing countries.

The literature on efficiency assessment in the insurance companies shows a lack of addressing undesirable outputs (such as claims) within the DEA framework; so this study aims at bridging this research gap. Also, the study provides an overview of the efficiency of Algerian insurance companies.