Adli Hamdam, Ruzita Jusoh, Yazkhiruni Yahya, Azlina Abdul Jalil and Nor Hafizah Zainal Abidin
The role of big data and data analytics in the audit engagement process is evident. Notwithstanding, understanding how big data influences cognitive processes and, consequently…
Abstract
Purpose
The role of big data and data analytics in the audit engagement process is evident. Notwithstanding, understanding how big data influences cognitive processes and, consequently, on the auditors’ judgment decision-making process is limited. The purpose of this paper is to present a conceptual framework on the cognitive process that may influence auditors’ judgment decision-making in the big data environment. The proposed framework predicts the relationships among data visualization integration, data processing modes, task complexity and auditors’ judgment decision-making.
Design/methodology/approach
The methodology to accomplish the conceptual framework is based on a thorough literature review that consists of theoretical discussions and comparative studies of other authors’ works and thinking. It also involves summarizing and interpreting previous contributions subjectively and narratively and extending the work in some fashion. Based on this approach, this paper formulates four propositions about data visualization integration, data processing modes, task complexity and auditors’ judgment decision-making. The proposed framework was built from cognitive theory addressing how auditors process data into useful information to make judgment decision-making.
Findings
The proposed framework expects that the cognitive process of data visualization integration and intuitive data processing mode will improve auditors’ judgment decision-making. This paper also contends that task complexity may influence the cognitive process of data visualization integration and processing modes because of the voluminous nature of data and the complexity of business processes. Hence, it is also expected that the relationships between data visualization integration and audit judgment decision-making and between processing mode and audit judgment decision-making will be moderated by task complexity.
Research limitations/implications
There is a dearth of studies examining how big data and big data analytics affect auditors’ cognitive processes in making decisions. This paper will help researchers and auditors understand the behavioral consequences of data visualization integration and data processing mode in making judgment decision-making, given a certain level of task complexity.
Originality/value
With the advent of big data and the evolution of innovative audit procedures, the constructed framework can be used as a theoretical foundation for future empirical studies concerning auditors’ judgment decision-making. It highlights the potential of big data to transform the nature and practice of accounting and auditing.
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Ruzita Jusoh, Yazkhiruni Yahya, Suria Zainuddin and Kaveh Asiaei
Drawing on the natural resource-based view (NRBV) of the firm, this study aims to investigate the mediating role of sustainability performance management (SPM) practices in the…
Abstract
Purpose
Drawing on the natural resource-based view (NRBV) of the firm, this study aims to investigate the mediating role of sustainability performance management (SPM) practices in the relationship between corporate sustainability strategy (SS) and sustainability performance (SP). The conceptualization of SS and SPM practices follow the NRBV resources and capabilities to promote sustainability for competitiveness.
Design/methodology/approach
Data for the study were collected through a questionnaire from 114 small-medium to large organizations within environmentally sensitive industries operating in Malaysia.
Findings
The results indicate the indirect relationship between SS and SP through SPM practices. The results suggest that SS can only be realized through a broader management accounting control system (such as SPM practices) that provides information to generate, analyze and control environmental, social, economic and governance performance.
Practical implications
As some organizations may face their resource constraints, this study may help managers and management accountants prioritize their focus on SS and adopt the necessary SPM practices to enhance their SP.
Originality/value
This study sheds new light on the role of the SPM practices adopted by firms to manage their SS.
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Suleiman Dalhatu Sani and Mustapha Abubakar
This paper aims to recommend a framework that serves as a practical work tool for conducting risk-based Shari’ah audit (RBSA) in Islamic financial institutions (IFIs).
Abstract
Purpose
This paper aims to recommend a framework that serves as a practical work tool for conducting risk-based Shari’ah audit (RBSA) in Islamic financial institutions (IFIs).
Design/methodology/approach
Qualitative research method was used through critical in-depth content analysis of documented literature to generate deep insights, further supported with a hypothetical illustrative case study application of the framework on an Islamic bank, aimed at bringing the framework to a practical, near real-life scenario.
Findings
A robust RBSA framework has been developed which focuses on Shari’ah non-compliance risks to systematically and practically arrive at a rated opinion on the level of an IFI’s adherence with Shari’ah rules and principles as recommended by the Accounting and Auditing Organization for Islamic Financial Institutions, aimed to safeguard the IFI and promote financial system stability at large.
Research limitations/implications
Practical realities limited the study to the use of a hypothetical case study bank. Future researchers can apply the framework to a real case study of diverse IFIs for effective contextual recalibration in diverse jurisdictions.
Practical implications
This paper aids the development of both internal and external Shari’ah audit practice using the risk-based approach.
Social implications
The RBSA framework contributes to promoting public trust and confidence in the Islamic finance industry.
Originality/value
This paper has proposed this RBSA framework as a practical work tool for Shari’ah auditors in their engagements and regulators in promoting sound governance and financial system stability. It provides foundation for future researchers in the field.
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Mustafa Faza', Nemer Badwan and Montaser Hamdan
This study aims to conduct a review and analysis of the literature on Shariah audit compliance by examining the difference between internal and external auditors, the scope of…
Abstract
Purpose
This study aims to conduct a review and analysis of the literature on Shariah audit compliance by examining the difference between internal and external auditors, the scope of internal Shariah audits and the qualification of Shariah auditors.
Design/methodology/approach
The current study used content analysis and the descriptive approach to achieve the main objective of the study. To ensure that Islamic Financial Institutions’ (IFIs) practices preserve Shariah principles and values when providing Shariah-compliant products and services, this audit will be used to supervise and monitor the operations of IFIs. The main goal of Shariah compliance auditing is to protect the interests of IFIs stakeholders, including account holders, shareholders, creditors, management and employees, as well as the general public while ensuring that the mechanisms of checks and balances in place are appropriate and tailored to the goals and missions of its establishment following the Maqasid Al-Shariah.
Findings
The findings of this study attempt to contribute to the body of knowledge surrounding Shariah audit compliance by advising IFIs on the value of Shariah compliance auditing in addressing the needs of its stakeholders. As a result, the benefits of Shariah compliance audits will be maximized, and future legislative changes will be implemented to reduce or completely remove the risk of Shariah’s failure to comply.
Practical implications
This research advises IFIs on the usefulness of Shariah compliance auditing in addressing the demands of its stakeholders to add to the body of knowledge on Shariah audit compliance. Moreover, all parties involved to take action to reduce the gap that will significantly affect stakeholders’ confidence, particularly concerning the Shariah compliance of the IFIs’ products and services on their operations and activities.
Originality/value
The advantages of Shariah compliance audits will thus be maximized, and future regulatory improvements will be made to lessen or eliminate the danger of Shariah noncompliance.