Developing a conceptual framework for operational shari’ah audit in Indonesian Islamic banks: a qualitative study

Despite growing recognition of Operational Shari’ah Audit (OSA) as a critical pillar of Shari’ah governance in Islamic banking, its practice in Indonesia remains fragmented, inconsistently defined, and largely modelled on conventional internal audit frameworks that prioritise compliance over value-based governance. OJK regulations provide broad structural arrangements but limited operational clarity, while institutional practices often lack integration of Maqasid al-Shari’ah and Islamic ethical principles. Addressing this gap, this study develops and refines a conceptual framework for effective OSA practice in Indonesian Islamic banks by integrating the 4Es—Economy, Efficiency, Effectiveness, and Ethics—with Maqasid al-Shari’ah and Islamic Agency Theory. A qualitative interpretivist approach informed by hermeneutic phenomenology was adopted, drawing on 14 semi-structured interviews with internal Shari’ah auditors and governance stakeholders, complemented by eight audit charters and five regulatory documents. Data were analysed thematically using ATLAS.ti and triangulated across interview, institutional, and regulatory sources. Four thematic pillars emerged: conceptual clarity, auditor competency and independence, organisational commitment, and regulatory and technological integration. Findings reveal tension between practice-oriented adaptability and oversight-driven standardisation: auditors emphasise corrective outcomes, while regulators stress certification, independence, and safeguards. Audit charters confirm institutional support but remain insufficient in prescribing Shari’ah-specific operational methodologies. Theoretically, this study extends Islamic Agency Theory and Maqasid-based governance by applying spiritual accountability and Shari’ah ethical objectives to audit practice. Practically, the refined framework offers Islamic banks, auditors, SSBs, and regulators a diagnostic tool for strengthening audit scope, methodology, competency, coordination, and digital readiness. Its novelty lies in conceptualising OSA as a distinct, context-sensitive, 4Es-based audit approach grounded in Indonesian Islamic banking evidence.