Sharia Audit Problems in Zakat Institutions: Evidence From Indonesia

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1. JEBIS : Jurnal Ekonomi dan Bisnis Islam p-ISSN : 2442-6563 e-ISSN : 2525-3027 Available online at https://e-journal.unair.ac.id/JEBIS Volume 6, No.2, July – December 2020 Page 304–316 doi:10.20473/jebis.v6i2.23329 SHARIA AUDIT PROBLEMS IN ZAKAT INSTITUTIONS: EVIDENCE FROM INDONESIA Aisyah As-Salafiyaha Aam Slamet Rusydianab a,b Sharia Economic Applied Research & Training (SMART) Indonesia Email: assalafiyahsmart@gmail.coma; aamsmart@gmail.comb ARTICLE HISTORY Received: 20 November 2020 Revised: 7 December 2020 Accepted: 8 December 2020 Online available: 11 December 2020 Keywords: Delphi, Sharia Audit, Zakat Institution *Correspondence: Name: Aisyah As-Salafiyah Email: assalafiyahsmart@gmail.com ABSTRACT This study aims to determine the opinions and recommendations from the experts regarding the problem of the audit system in zakat institutions in Indonesia to determine the priority of the most important variables to be fixed. This research was conducted in August 2020 using primary data obtained from interviews with experts consisting of academics, practitioners and regulators with a background in sharia economics. The data were analyzed by the Delphi method to find the main priority and agreed upon convergence by experts. The results showed that of the 15 variables of audit problems at zakat institutions in Indonesia, there are 13 variables with convergent-convergent consensus based on expert opinion and only 2 variables with divergent consensus. The 3 main priority problems of auditing in zakat institutions in Indonesia are (1) an Insufficient number of sharia auditors, (2) The absence of strong rules related to sharia auditing, (3) HR competence. This research can be used by readers to make improvements in the audit system of zakat institutions in Indonesia with priority according to the findings of this study. This research is the first research that comprehensively calculates the expert's assessment regarding audit problems in Indonesian zakat institutions using the Delphi method and its priority recommendations. INTRODUCTION Sharia audits have an important role in the development of Islamic institutions including zakat institutions. In its implementation, every Islamic institution is directed at contributing to the achievement of the goals of Islamic law/maqahasid as-sharia (Kasim et al., 2009). The development of the potential and management of Islamic institutions (zakat institutions) leads to the development of increased trust in the institution itself to maintain the sustainability of the institution (Sawandi et al., 2017). One way to increase public trust is to expand the benefits of sharia auditing to cover processes, programs/products, the environment and society (Sultan, 2007).
2. As-Salafiyah , Rusydiana, The need for certainty in compliance with sharia has prompted the emergence of a new audit function, namely sharia auditing. In this case, sharia auditors play a crucial role in ensuring the accountability of financial statements and compliance with aspects of sharia (Yaacob & Donglah, 2012). This need is the same as the spirit of the formation of zakat law no 23 of 2011, which includes: institutionalizing, accountability, integrated, professional, and trustworthy as well as usefulness and justice. This aspect is also a focus on developing sharia audits in zakat institutions. Sharia internal audit is formed in Islamic financial institutions due to several differences between Islamic governance and conventional corporate governance in general (Tooranloo & Azizi, 2018). These differences can lead to differences in features, required internal audits, such as orientation, scope objectives, disclosures and reports, auditor skills, to the required qualifications (Algabry, Alhabshi, Soualhi, & Othman, 2020). Regarding zakat institutions in Indonesia, as an institution that regulates Islamic social finance under the Baznas institution, the audit sector is still not perfect and is still being improved. To support this gradual improvement, it is necessary to know and prioritize which problems should be prioritized to find solutions. The ultimate goal is to produce better sharia audit quality in Indonesia's zakat institutions, so that compliance with Sharia is more secure than before. Based on this background, the authors limit the research gap to be studied, namely only focusing on assessing the ranking and description of priority problems that occur in the process of developing and implementing sharia audits in zakat institutions. The sharia audit referred to in this case, is a sharia audit related to sharia compliance carried out by zakat institutions in Indonesia. LITERATURE REVIEW Sharia Audit In Islamic economics, sharia auditing can be likened to hisbah, which is an institution under the authority of the state that aims to safeguard the public and ensure that all transactions that take place are in accordance with sharia guidelines (Abd Rahman et al., 2020). The effectiveness of Islamic internal audit is believed by some experts to help develop the performance of Islamic financial institutions, this is because financial reports indirectly reflect the quality of its internal sharia audit department (Spiegel et al., 2012). So that sharia internal audit is considered the backbone of a business's accounting because it is the part that records all transactions that take place (Khalid & Masron, 2015). According to Lahsasna et al. (2018) and Yaacob and Donglah (2012), the main objective of the sharia audit is all activities carried out. And of course, there are different concerns from traditional audits, according to Sultan (2007) that the scope of sharia audits includes the aspects of financial statements, operations, structures people as well as information technology. Published by University of Airlangga. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by-nc-sa/4.0/)
3. Jurnal Ekonomi dan Bisnis Islam , Vol. 6, No. 2, July - December 2020 In International Auditing Standards (IAS), as research conducted by Khan (1985) contained in Lahsasna et al. (2018) that traditional auditing is deeply for capitalists and Western Worldview. Meanwhile, in the International Auditing and Assurance Standard Board (IAASB), it is in line with what was said that traditional auditing only focuses on shareholders' trust. There are many differences between traditional auditing and sharia auditing. As in Shafii et al. (2014) that traditional audits cannot provide an analysis of the aspects of usury, gharar and maisir. But only focus and presentation on the financial aspects of an institution or better known as a financial statement audit. Meanwhile, Sharia audit can cover all aspects of the needs of institutional activities. So in principle, the sharia principle is in line with all the activities carried out in the institution. One of the objectives of implementing sharia audits in zakat institutions is the creation of supervision and aims to ensure that zakat management institutions carry out activities of collecting, distributing and utilizing consumptive and productive zakat and the use of amil rights based on sharia principles (Kemenag, 2018). It is also a part of performance measurement and taking action to ensure the desired results and becomes a process or step in management activities (Ichsan, 2011). Sharia auditors ensure that zakat management institutions have risk management related to sharia compliance to minimize the potential for fraudulent practices and other potential mistakes (Kemenag, 2018). In Lahsasna et al. (2018), it is explained that the evolution and development of attesting institutions have been started since the era of the modern Sultan Beyazid II. This institution, called Hisbah, is an independent institution that has a role in socio-economic, moral, and market supervision, as an institution that can provide preventive actions for monopoly activities, standardization of products, facilities for needs and handling of fraud (Islahi, 2010). According to observations made by Kasim et al. (2009) regarding Islamic institutions in Malaysia illustrates that the implementation and implementation of sharia auditing are still very minimal in the absence of a sharia audit framework and require the development of a sharia audit framework. With the same theme, Yaacob and Donglah (2012) stated that the sharia audit framework cannot be developed properly and needs great attention. As is well known, at least in building a framework four aspects need to be considered, namely line management, management reviews, external audit and internal audit. 306
4. As-Salafiyah , Rusydiana, • Planing & Reporting Review Framework • Risk Management Framework • Quality framework • Health and safety polcy •Control self assesment •Bussines Improvement review Line Management Management Review External Review Internal Review •External audit •regulator •ombudsman •internal auditassurance service both complience •advisory service •Council Figure 1. Audit and Assurance Framework Islamic financial institutions, including zakat institutions in Indonesia, need to establish governance mechanisms, one of which consists of sharia audits, their existence is expected to reduce the level of non-compliance with sharia so that these institutions can run their business activities effectively without exposing their operational activities to unacceptable levels of risk. However, the task of reviewing the risk of non-compliance with sharia together with financial risk will spend more time on conducting sharia audits (Kaaroud et al., 2020). Based on some of these previous studies, it was found that there have been many studies that discuss the problem of auditing in zakat institutions, both in the form of explanations of what sharia audits are, the urgency of zakat institutions in improving sharia audits, to how the implementation of the concept of sharia auditing in zakat institutions. However, not many studies discuss problems in sharia auditing in zakat institutions using the Delphi method, which involves experts from regulators and academics to practitioners. Therefore, this study seeks to evaluate the problems faced by zakat institutions that implement sharia audits with actual data in 2020. This study also shows the priority order of problems so that zakat institutions can gradually improve them from the most important. Delphi According to Loë et al. (2016), the majority of research with the Delphi method uses a questionnaire with a Likert scale, ranking preferences, or a combination of scoring and reasons. In this study, the authors used a preference ranking approach with weights from 1 to 9. The greater the weight value, the more important the variable according to respondents/expert panelists. Published by University of Airlangga. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by-nc-sa/4.0/)
5. Jurnal Ekonomi dan Bisnis Islam , Vol. 6, No. 2, July - December 2020 The composition of expert respondents relates to the validity of the research results (Spencer‐Cooke, 1989). Because in this method, the opinions and judgments of the panelists are taken and analyzed, it is very much determined by how the panel members are selected. (N. Dalkey & Helmer, 1963)proved that statistically, the Delphi method has a tendency, not only to converge but also to converge in the right direction. According to N. C. Dalkey (2018), the general characteristics of the Delphi method can be explained as follows: (1) Anonymous, meaning that in the use of questionnaires or other communication related to responses, identification of panelist members (experts) is stated anonymously or closed; (2) There is feedback control, meaning that the control allows interaction between panel members to reduce distortion. This interaction occurs at each stage where the previous results will be given at the next stage. Panelists were then asked to re-evaluate their initial assessment by comparing it with the group assessment; (3) Statistical group response, meaning that the group assessment is expressed as the statistical average of the panelist member's assessment. N. Dalkey and Helmer (1963); Linstone and Turoff (2011); and Melander (2018) found that the main advantage of the Delphi method in groups is that the consensus will converge to reach an agreed assessment from the panelists. Applicationally, this method is very easy to use and does not require complex statistical or mathematical skills to design, implement, and analyze the Delphi method. This method also avoids the existence of groupthink, which shows the domination of one / two people in the group or better known as the bandwagon effect. The existence of flexibility is also a strength of this method if the panelists who may have limited time and location can have the opportunity to respond when they have spare time. The limitation of the Delphi method is that the consensus generated from the Delphi method is not necessarily the true consensus, because it can be a false consensus. The pseudo consensus is not the best judgment, but rather a compromise position (Mitroff & Turoff, 1973). According to Linstone and Turoff (2011), the weakness of this method is that it does not allow contributions from other perspectives related to problems in the model. Meanwhile, according to Barnes (1987), the assessment in the Delphi method is derived from groups that represent society and may not be representative. The Delphi method is widely applied in various fields of research. Gupta and Clarke (1996) examined 463 Delphi related articles and concluded that the 3 most popular areas for Delphi application were education, business and healthcare. Other fields are related to manufacturing, management and IT, social science, real estate, engineering, transportation, the environment, even tourism. So far, there are several types of Delphi method research, both standard and modified, including Delphi real-time spatial, Delphi group, Delphi market, Delphi realworld to Delphi policy. Based on a lot of literature in indexed and reputable journals, 308
6. As-Salafiyah, Rusydiana, the majority of Delphi application research is conducted in 2 and 3 rounds. Meanwhile, the majority of participants or Delphi expert respondents were between 11 and 20 respondents. RESEARCH METHOD This research will use the Delphi method. According to Sossa et al. (2019), the 3 most widely used statistical indicators in the application of the Delphi method are the mean (average) value, the standard deviation value, and the interquartile range or IR value. Apart from these three statistical indicators, the other indicators are the median, cluster, mode and variance values. In this study, the statistical indicators used were the mean, standard deviation, and interquartile range values. This statistical indicator is used to see the level of convergence or consensus of experts. Consensus or opinion convergence is the final result of the Delphi method, to see the level of robustness of the existing variables. According to Meijering et al. (2013), there are many indexes or measurement indicators to see the level of agreement or consensus among respondents, including DeMoivre index (DM), Strict agreement index (SA), Light's Kappa (KL), Fleiss' Kappa (KF), Cronbach's alpha (CA), Inter-class correlation coefficient absolute (ICA) to Kendall's measure of concordance (W). The Delphi method is a group process that involves interaction between the researcher and a group of experts related to a particular topic, and through the help of a questionnaire. This method is used to find common ground on future trends using a structured information gathering process. This method is useful when the opinions and judgments of experts and practitioners are needed in solving problems. This study will use 3 statistical indicators that are most widely used in the application of the Delphi method, namely the mean (average) value, the standard deviation value, and the interquartile range or IR value. The first measure of convergence assessment is when the answers or ratings of all respondents have a standard deviation value of less than 1.5 (<1.5). The standard deviation notation formula as it is known is as follows. Σ(