The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System

Abdulhakim Mohamed MASLİ; Musa MANGENA; Donald HARRADİNE

doi:https://doi.org/10.25272/ijisef.485437

Article Details

The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System

Authors:

Abdulhakim Mohamed MASLİ | Musa MANGENA | Donald HARRADİNE

Publisher:

Politik Ekonomik ve Sosyal Araştırmalar Merkezi

Main Topics:

Management

Journal:

International Journal of Islamic Economics and Finance Studies 2019 Vol.5 Issue 2, pp.1-22

Document Type:

Article

Publication Date:

7/2019

Document Language:

English

Document ID (Org No.):

2000643285

Frequency:

Tri-annual

eISSN:

2149-8407

pISSN:

2149-8393

DOI:

https://doi.org/10.25272/ijisef.485437

Abstract:

 


This paper aims to explore the role of audit committees (ACs) in the
Libyan banking sector (LBS) and to investigate the impact on AC practice of the
sector’s recent shift to an Islamic banking system. Little is known about the
role of these committees, which were only made compulsory in Libya in 2010.


The findings support agency theory in that they perceived these
committees as being responsible for reviewing financial statements, the
internal auditing function and the external audit process. However, the
perception was that ACs are not currently carrying out these responsibilities
effectively; participants perceived ACs as spending too little time reviewing
financial statements, rarely challenging weaknesses in the work of internal auditors
and seldom following up or supervising the work of external auditors. One
explanation for this state of affairs is that ACs in the LBS are primarily
designed to create legitimacy outside the organisation rather than to effect
radical change within it. The study also found that it is not the
application of Islamic law per se that is perceived as having an adverse impact
on AC practice in the LBS, but the speed at which this transition is taking
place in an already weak banking environment.







This research helps expand our knowledge of current AC practice as a key
mechanism of corporate governance (CG) by being the first to investigate how
this role is performed in Libyan banks, which are in the early stages of
implementing Islamic law. The research is also important because it addresses
an information gap in the accounting literature by investigating AC
effectiveness in a developing country, a context which is still poorly
understood.



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Article Details

The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System

Authors: Abdulhakim Mohamed MASLİ | Musa MANGENA | Donald HARRADİNE

Publisher: Politik Ekonomik ve Sosyal Araştırmalar Merkezi

Main Topics: Management

Journal: International Journal of Islamic Economics and Finance Studies 2019 Vol.5 Issue 2, pp.1-22

Document Type: Article

Publication Date: 7/2019

Document Language: English

Document ID (Org No.): 2000643285

Frequency: Tri-annual

eISSN: 2149-8407

pISSN: 2149-8393

DOI: https://doi.org/10.25272/ijisef.485437

Issues

Authors:

Abdulhakim Mohamed MASLİ | Musa MANGENA | Donald HARRADİNE

Publisher:

Politik Ekonomik ve Sosyal Araştırmalar Merkezi

Main Topics:

Management

Journal:

International Journal of Islamic Economics and Finance Studies 2019 Vol.5 Issue 2, pp.1-22

Document Type:

Article

Publication Date:

7/2019

Document Language:

English

Document ID (Org No.):

2000643285

Frequency:

Tri-annual

eISSN:

2149-8407

pISSN:

2149-8393

DOI:

https://doi.org/10.25272/ijisef.485437