Effect of Shariah Governance on the Prevention of Frauds in the Pakistani Banking Industry

Abstract

In the current world, both internal and external factors affect the financial system, demanding continual regulatory scrutiny. Several individuals continue to live and work in areas that are unaffected by the banking sector and outside the purview of banks. It is essential to take that market into account as doing so will enable bankers to generate healthy profits and aid in the growth of the economy. Investigating the effects of Shariah Governance on the avoidance of fraud in terms of a compliance audit is the goal of this study. Applying quantitative approaches, information was acquired from the top executives of Islamic and conventional banks that operate within Pakistan. For the survey, representatives from Islamic banks were approached. The hypothesized claims were tested using quantitative analysis, which was done using SPSS software. Bankers were questioned about financial fraud and offered counterarguments to their views as well as solutions for reducing banking fraud. The study's conclusions indicate managers obtain education, growth, and advice on fraud-prevention strategies. It requires guarding against internal fraud events and gaining the patrons' respect and confidence.