External Shari'ah Audit (ESA) is a control mechanism meant for formulating an objective view by an independent Shari'ah audit team about the obligation of Islamic banks' (IBs) management, personnel and other divisions towards Shari'ah compliance. This study principally aims to examine the relevancy of ESA and review committee in enhancing the level of Shari'ah compliance quality and accountability of IBs in Bangladesh. The study examines data from 17 respondents obtained via semistructured interviews and secondary sources in library. This study establishes that Shari'ah officers of IBs in Bangladesh are unable to perform audit functions properly which indicates the limitations of current Shari'ah audit functions. The study discovers the need for an independent ESA for proper auditing of IBs' operations in Bangladesh with a view to Shari'ah compliance. Thus, an ESA and review committee is imperative to enhance the quality of Shari'ah compliance and ensure accountability of all divisions within IBs. This audit is to be provided either by Bangladesh Bank (BB), the central bank of the country or a third party such as Islamic chartered accountants' firms or Shari'ah audit firms. The study would contribute to existing literature on the importance of ESA and its conditions in Bangladesh. The study also provides some instructions for global Islamic banking practice on the issues examined. The study contributes to agency, stakeholder and legitimacy theory via highlighting the inability of Shari'ah auditors to perform their function independently and efficiently.

Shari'ah Secretariat plays a significant role in assisting Shari'ah Supervisory Boards (SSBs) in their role in achieving Shari'ah compliance in Islamic banks (IBs). The key objective of the study is to develop a demographic framework of the Shari'ah Secretariat for the IBs in Bangladesh. The study applied qualitative case study research. The data have been collected from 17 respondents through semi-structured interviews from IBs and professional experts in Bangladesh. This study proposes a full-time Shari'ah Secretariat and several departments for further enhancement of the Shari'ah functions in IBs in Bangladesh. The framework proposed in this study covers the formation, functions, composition, qualification, reporting line, independence, remuneration and terms of appointment of the Shari'ah Secretariat to set a uniform benchmark for all IBs in Bangladesh. It is anticipated that the outcomes of this research will assist to further strengthen the Shari'ah governance of IBs in Bangladesh. This research contributed to the national and global regulatory authorities and IBs by proposing a Shari'ah Secretariat framework for the smooth functioning of the IBs in Bangladesh. The framework proposed in this study covers the formation, functions, composition, qualification, reporting line, independence, remuneration and terms of appointment of Shari'ah Secretariat.

The study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the relevant areas. This research applied a qualitative method, and data were collected through conducting semi-structured interviews in Bangladesh. A total of 17 interviews were conducted for accomplishing the research objectives. The study finds that there is no comprehensive Shariah audit manual in the current operation for IBs in Bangladesh, and as such, the requirements of their Shariah compliance remain a big question. Although the Shariah audit is conducted within IBs, and the Shariah audit officers or Shariah officers inspect necessary documents while conducting the Shariah audit, they only cover 10-20% of total investments and transactions. Based on the findings of this study, it is recommended that the Shariah auditing tasks should broadly cover at least 80% of the investment portfolios, documents and financial contracts and activities. The findings of this research are expected to significantly contribute to the regulatory authorities concerned in Bangladesh and beyond, which include the suggestions that IBs can adopt to strengthen their Shariah governance system. The study also pinpoints that in the current system, Shariah auditors' roles are somehow limited in examining and checking the investment sides with a minimal portion (10-20%), for which they are unable to perform their responsibilities in a befitting manner to provide assurance services and overall Shariah compliance of IBs activities. This study explores the current Shariah audit systems and provides recommendations to improve the existing systems which will be beneficial for Islamic banks of Bangladesh.