Achieving the SDGs in Shariah Audit by the Islamic Banks in Indonesia

The Islamic banking industry in Indonesia has received great demand from stakeholders with the rise of the assurance and accountability of the business. Further measurements are needed to be taken through a comprehensive Shariah audit for the transaction process and the execution of contracts. The implementation of the Shariah audit resulted in the best performance and reputation of the Islamic bank itself, and ultimately contribute to the economic growth and achieve the Sustainable Development Goals (SDGs) statute. This study examines the Shariah audit perception and practice in Indonesian Islamic banks. The study also explores the implication of Shariah audit in Indonesia Islamic banks toward SDGs achievement. The study adopts a qualitative research method with structured interviews. From the findings, the results indicate that auditing practice in Islamic banks has some differences with auditing in the conventional banks due to some distinguishing features possessed by Islamic banks. In addition, lack of a proper Shariah auditing framework in Islamic banks, while a clear provision from the Financial Services Authority of Indonesia (OJK) is only on Islamic banks’ products and operations with no detailed guidelines on how to conduct the Shariah auditing. In conclusion, a proper Shariah audit practice in Islamic banks should give a notable impact on the SDGs achievement. There should be an improvement in implementing Shariah's audit practice. The Islamic bank should focus on improving the Shariah audit framework and human resources since there are two major issues found in this study