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Shari’ah Corporate Governance and Fraud Prevention: A Framework for Ethical Accountability, Compliance, and Stakeholder Protection

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  • Maslinawati Mohamad

    (Faculty of Accountancy, University Technology MARA, Puncak Alam Campus, Selangor Branch, Selangor, Malaysia)

Abstract

This article discusses a conceptual framework for Shariah corporate governance regarding fraud prevention. The importance of adhering to Islamic ethical principles in corporate governance as well as the importance of the role of internal controls in reducing the risk of fraud have been highlighted in this article. Using a systematic review of the existing literature on Shariah corporate governance and fraud prevention, this article proposes a set of principles designed to foster ethical behavior and reduce the likelihood of fraudulent activities within organizations. The current corporate governance landscape faces many challenges that affect its integrity and increase the risk of fraud. These challenges include CEO duality, insufficient levels of exposure, inappropriate board sizes, lack of adherence to Islamic ethical practices, and concerns about the independence of directors and executives, as well as compliance with the Quran and Hadith. By prioritizing Shariah compliance and implementing robust internal controls, the proposed framework aims to address these challenges and promote a culture of ethics and accountability within organizations.

Suggested Citation

  • Maslinawati Mohamad, 2025. "Shari’ah Corporate Governance and Fraud Prevention: A Framework for Ethical Accountability, Compliance, and Stakeholder Protection," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 8787-8793, September.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:8787-8793
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    References listed on IDEAS

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    1. repec:eme:ijlma0:ijlma-07-2022-0162 is not listed on IDEAS
    2. Hounaida Mersni & Hakim Ben Othman, 2016. "The impact of corporate governance mechanisms on earnings management in Islamic banks in the Middle East region," Journal of Islamic Accounting and Business Research, Emerald Group Publishing Limited, vol. 7(4), pages 318-348, September.
    3. Ach Maulidi, 2022. "Gender board diversity and corporate fraud: empirical evidence from US companies," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 30(2), pages 309-331, March.
    4. Ach Maulidi, 2022. "Gender board diversity and corporate fraud: empirical evidence from US companies," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 30(2), pages 309-331, March.
    5. Tariq H. Ismail & Zakia Abdelmoniem, 2013. "Stock option fraud prevention in Islamic country: does corporate governance matter?," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 11(1), pages 4-28, June.
    6. Emelia A. Girau & Imbarine Bujang & Agnes Paulus Jidwin & Jamaliah Said, 2021. "Corporate governance challenges and opportunities in mitigating corporate fraud in Malaysia," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 29(2), pages 620-638, July.
    7. Tariq H. Ismail & Zakia Abdelmoniem, 2013. "Stock option fraud prevention in Islamic country: does corporate governance matter?," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 11(1), pages 4-28, June.
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