This study aims to analyze the implementation of PSAK 101 and Islamic Corporate Governance (ICG) in Islamic cooperatives, as well as to identify the challenges in their application. Islamic cooperatives play a significant role in promoting financial inclusion and community economic empowerment; however, the quality of financial reporting and governance remains a major concern. This research adopts a qualitative approach using a case study method. Data were collected through interviews, documentation, and observation, and were analyzed using a descriptive-analytical approach with reference to PSAK 101 standards and the principles of Islamic Corporate Governance. The findings indicate that the implementation of PSAK 101 in Islamic cooperatives has not fully complied with the applicable standards, particularly in terms of incomplete financial statement presentation and insufficient disclosure. In addition, the implementation of Islamic Corporate Governance remains partial, especially in aspects of transparency, accountability, and the role of the Sharia Supervisory Board. This study contributes by identifying the gap between accounting standards and actual practices, and by offering recommendations to improve the quality of financial reporting and governance in Islamic cooperatives.

Financial cooperatives play an important role in promoting financial inclusion and community development. This study investigates how board characteristics, including size, gender diversity, and tenure, influence the financial performance of 930 Brazilian financial cooperatives between 2008 and 2022. Using panel data and the System Generalized Method of Moments (SYS-GMM), the results reveal that larger boards negatively affect performance due to coordination inefficiencies, while longer tenure on supervisory boards enhances stability and oversight. Female representation on the board of directors shows a significant negative association with financial performance, reflecting potential cultural and institutional challenges in governance. Cooperative size positively affects performance, reflecting economies of scale, while leverage and network affiliations pose financial challenges. The findings highlight the importance of designing governance structures that balance inclusivity, representation, and financial sustainability, providing insights for improving governance in cooperatives operating in emerging markets.

One way the Indonesian government eradicates corruption is by forming the Corruption Eradication Committee and one way to take action against corruption is by conducting hand catching operation. The purpose of writing this article is to explain the causes of the decline in the number of hand catching operation in recent years, especially in 2024, even though the Corruption Eradication Committee hand catching operation had been intensively carried out to prosecute corruption, but instead of experiencing a spike, the number of hand catching operations actually decreased. The preparation of this article uses a normative legal research method related to hand catching operations and the latest Corruption Eradication Committee Law. In addition, in order for the analysis results to be more in-depth, the author also uses a legislative and conceptual study approach. There are 2 (two) research results in this article, namely, first, the term hand catching operations is indeed not found in the Criminal Procedure Code and the Corruption Eradication Committee Law, but a series of actions that are the same as hand catching operation containing the stages of wiretapping, searches, arrests and confiscations have been regulated in the latest Corruption Eradication Committee Law. Second, the hand catching operation which is currently experiencing a decline in 2024 is due to several things such as changes in the hand catching operation mechanism in carrying out wiretapping, searches, and/or confiscations, permission from the Supervisory Board is required. Hand catching operation has also been studied by corruptors who on average have high intellectual education so that by studying the hand catching operation method

This study aims to analyze and identift the validity of the Notary deed that was not read out by the Notary before the applicants and, to analyze and identify the role of the Notary Supervisory Board in terms of enforcing UUJN regarding the behavior of a Notary who does not read the Notarial deed that they have made. This is a qualitative normative legal research as it examines legal norms related to the validity of notarial deeds which were not read out by the notary before the applicants and witnesses at the time of signing the minutes of the deed. The results of the study concluded that the Notary is obliged to guarantee the certainty of the day, date, month, year, and facing time listed or mentioned at the beginning of the Notarial deed, as proof that the parties face and sign the deed and all procedures for making the deed have been carried out according to the applicable legal regulations in UUJN. In the case of the notarial deed not being read to the applicants and witnesses due to the notary's negligence is certainly in contrary to the UUJN provisions, which undoubtedly will have legal implications for both the deed and the notary concerned. The reading of the deed that is not carried out by a Notary will result in a decrease in the value of proving an authentic deed to become a private deed as stated in Article 16 paragraph (9) UUJN. Keywords: Notary, Be careful, Deed Reading. Notaries are consideres responsible and can be blaned if there is a misunderstanding regarding the purpose and content of the deed resulted inevasion of the deed

Robust governance constitutes a crucial foundation for the sustainability and competitiveness of the Islamic financial industry. This study aims to analyze the role of transparency and accountability as two main pillars of Islamic financial governance, focusing on their implementation, effectiveness, and impact. The discussion is centered on three key research questions: (1) the implementation and challenges of transparency and accountability in profit-sharing products (mudharabah and musyarakah), (2) the effectiveness of the Sharia Supervisory Board (SSB) in ensuring sharia accountability and transparency and its influence on public trust, and (3) the significant impact of disclosure transparency and accountability levels on financial performance and institutional stability. The literature review indicates that although the implementation of transparency and accountability in profit-sharing products faces challenges such as information asymmetry and accounting complexity, the effectiveness of the SSB—supported by independence and competence—has proven to be a catalyst for enhancing public trust. Furthermore, commitment to transparency and accountability is not merely a fulfillment of sharia principles but is also positively correlated with improved financial performance (such as profitability) and institutional stability through mechanisms that reduce the cost of capital and enhance resilience to crises. The study concludes that strengthening these two pillars represents a sustainable business strategy. Accordingly, recommendations are proposed for Islamic financial institutions, regulatory authorities, Sharia Supervisory Boards, and the public to synergistically promote more transparent and accountable governance practices in order to realize an Islamic financial system that is not only profitable but also resilient and trusted.

This study investigates the influence of profitability, third-party funds, and the Sharia supervisory board on Islamic Social Reporting (ISR) among ASEAN countries over the period 2022–2024. This study employs a quantitative approach using secondary data from Islamic banks in ASEAN countries during the period 2022–2024. The samples were selected using a purposive sampling technique, resulting in 51 observations, and the data were analyzed using panel data analysis with the assistance of E-Views software. This study found that profitability has no significant effect on ISR, third-party funds have a positive effect on ISR, and the Sharia Supervisory Board has no significant effect on ISR. This study has several limitations, including a short observation period (2022–2024) and a limited set of variables focusing only on financial and governance factors. Additionally, the ISR measurement relies on content analysis of annual reports, which may involve subjectivity and overlook the quality of disclosures. Future research is recommended to extend the study period, include additional variables, and broaden the sample scope to obtain more comprehensive and representative insights into ISR practices across ASEAN. Furthermore, a qualitative approach to examining the role of the Sharia Supervisory Board (SSB) is suggested to better understand its influence on the quality and depth of social reporting.

Regional Public Companies (Perumda) have a strategic role in supporting regional original income and community economic development. One of the Perumda operating in West Sumbawa Regency (KSB) is Perumda Bariri Aneka Usaha (Barinas). Perumda Barinas KSB is experiencing a multidimensional crisis characterized by directors never completing their terms of office, the absence of a standard corporate organizational structure, non-functioning management systems, and the lack of Good Corporate Governance (GCG) implementation. This study aims to analyze the internal-external conditions, determine the strategic position, and formulate development strategies for Perumda Barinas. A qualitative approach with a case study method was employed through in-depth interviews with 12 informants (local government officials, former directors, supervisory board members, employees, and partners) and SWOT weighting questionnaires distributed to 15 respondents. The identification results revealed three strengths (full regional ownership, substantial assets, broad business scope) and nine dominant weaknesses (leadership crisis, absence of a standard structure, GCG not yet implemented). External factors include five opportunities (natural resource potential, workforce, industrial zone-smelter, presence of private companies, population growth) and three threats (negative stigma, unhealthy competition, political dynamics). The SWOT analysis yielded an IFAS score of -0.41 and an EFAS score of 0.63, placing Perumda Barinas in Quadrant IV (Turnaround Strategy). The strategies are formulated in three stages: short-term (0-6 months) stabilization through the recruitment of definitive directors and a forensic audit; medium-term (6-18 months) GCG implementation and strategic partnerships; long-term (18-36 months) business expansion in logistics and agriculture. The practical implication is that the Regional Government needs to immediately undertake organizational restructuring and capital injection. The research is limited to a single case study where the SWOT weights depend on the perceptions of the informants.

Background: Purpose-oriented networks (1) are networks in which organisations arrange care together around a specific group of patients/clients/citizens to provide integrated care. This reflects the urgency to better align and organise care and support around people’s needs (2). Four criteria are important: A) degree of shared purpose, B) degree of membership of three or more actors, C) degree of joint effort for the determined mutual objectives, and D) governance aligned with cross-organisational collaboration (1). In the implementation of purpose-oriented networks, aligned accountability is yet underdeveloped. Accountability that needs to be delivered now is primarily organisational oriented (3) and includes both supervision (demanding accountability) and responsibility (delivering accountability)(4). A study about perspectives of Dutch national healthcare stakeholders of accountability in purpose-oriented networks was conducted. Approach: Representatives of national Dutch healthcare stakeholders participated in this study concerning Healthcare and Youth Inspectorate, Healthcare Authority, Healthcare Institute, Healthcare Insurance Company, Healthcare Insurers Association, Municipalities, Association of Netherlands Municipalities, Supervision Social Domain, Association of supervisors in healthcare, Accountancy firms, Patient Federation Netherlands. Questions concerned conceptual definitions of accountability, accountability mechanisms, accountability to supervisors, accountability that focuses on the perspective of society, citizens/clients/patients, accountability systems and accountability style (5). Results: All stakeholders interviewed consider the topic of accountability in purpose-oriented networks delivering integrated care to be of the utmost importance. These are: •Interrelationships within networks and the context of the network •Accountability to be shaped by the network itself or by others •The role of supervisory boards of the individual participating organizations in inter-organisational networks •Standards and rules from a supervisory perspective •The role of mandate and representation from the network •Accountability meets public values: quality care, affordability and accessibility. •All participants involved in purpose-oriented networks need to be included in the accountability process, from the beginning, through the process and in the follow-up. Implications: These themes, the ways of thinking and perspectives, provide a basis for further development of accountability in purpose-oriented networks. Overarching themes are the development of clear common goals, transparency, trust, resilience, adaptability and societal objectives. These implications can add to an effective integrated care governance and can add by providing a direction of organizing accountability on the scale of networks in the region. 1.Nowell B, Kenis P. Purpose-Oriented Networks: The Architecture of Complexity. Perspect Public Manag Gov. 2019 Sep 1;2(3):169–73. 2.Minkman M. Suitable scales; rethinking scale for innovative integrated care governance. Int J Integr Care. 2020;20(1):1–5. 3.Van Kerkvoorden DR, Ettema RGA, Minkman MMN. Accountability in healthcare in the Netherlands: A scoping review. Int J Health Plann Manage [Internet]. 2024 Apr [cited 2024 Jan 14];39(2):237–61. Available from: https://onlinelibrary.wiley.com/doi/10.1002/hpm.3743 4.Van Montfort C. Beschouwing over toezicht, accountability en rekenschap. 2024 [cited 2024 Oct 30]. Project EISON. Available from: https://www.tilburguniversity.edu/nl/onderzoek/instituten-en-researchgroepen/eison/beschouwingen-over-toezicht-accountability-en-rekenschap 5.Alvarez-Rosete A. An empirical investigation of accountability arrangements in 4 leading international integrated care systems [ Chapter Handbook Integrated Care, to be published]. In 2025.

This study examines the legal implications and liability of a Notary for the forgery of a Sale and Purchase Agreement Deed that occurred due to the Notary's negligence in carrying out his/her obligations. The research method used is normative juridical with a statutory approach and a case approach, based on the theory of legal certainty and the theory of legal responsibility. The results of the study indicate that the Notary's negligence in verifying the identity of the parties and the authenticity of the document resulted in the deed losing its authenticity based on Article 1868 of the Civil Code and can be declared null and void (nietig van rechtswege) based on Article 1320 of the Civil Code. The Notary's liability is multidimensional, including criminal liability based on Articles 263 and 264 of the Criminal Code, civil liability based on Article 1365 of the Civil Code, and administrative liability through the Notary Supervisory Board mechanism, as reflected in the Denpasar District Court Decision Number 89/PID.B/2020/PN DPS. The Notary's professionalism and thorough attitude are the main foundations in realizing legal certainty for the community.

This article analyzes the regulatory framework governing Islamic banking in Algeria, tracing its historical evolution from early colonial-era initiatives through post-independence reforms to its formal consolidation under Order 03-11 (2011), Regulation 20-02 (2020), and the Monetary and Banking Law No. 23-09 (2023). The first section examines the conditions for practicing Islamic banking, which may occur via fully dedicated institutions or independent Islamic windows within conventional banks, requiring financial, accounting, and administrative separation. It mandates internal Sharia supervisory boards, prior compliance certification from the National Sharia Board, licensing by the Monetary and Banking Council, subsequent approval by the Bank of Algeria Governor, and adherence to capital, integrity, competence, and prudential requirements. The second section details the Sharia-compliant operations permitted under Regulation 20-02—murabaha, musharaka, mudarabah, ijarah, salam, istisna‘, deposit accounts, and investment accounts—outlining their legal-jurisprudential foundations, characteristics, variants, and implementation mechanisms in Algerian banks, while underscoring prohibition of riba and strict Sharia adherence. The article concludes that Algeria has developed a relatively comprehensive licensing, Sharia, and supervisory regime for Islamic banking. Nevertheless, practical challenges persist in professional training, jurisprudential harmonization, and regulatory coordination. Recommendations include enacting a dedicated Islamic banking law, enhancing Sharia board independence, and advancing specialized capacity-building to bolster effectiveness, financial inclusion, and sustainable development.

The Islamic finance industry has experienced significant global growth, including in Indonesia, marked by the expansion of banking and non-bank institutions offering sharia-compliant financial products. Unlike conventional systems based on interest, Islamicf inancing utilizes contracts aligned with Islamic law, aiming to eliminate usury and promotes ocial and economic justice. Sharia principles serve not only as ideological foundations buta lso as operational guidelines, emphasizing transparency, ethics, and community welfare. However, the practical implementation of sharia contracts often encounters legal challenges, such as vague clauses, differing fatwa interpretations, and procedural inconsistencies. Thesel egal risks may undermine public trust and threaten the sustainability of Islamic financial institutions. Therefore, legal risk analysis is essential to ensure compliance and strengthen the credibility of the industry. Optimizing the role of the Sharia Supervisory Board (DPS) and enhancing legal risk management are crucial steps in maintaining sharia adherence and preventing contractual disputes in Islamic financing.

Purpose This study investigates the relationship between key audit matters (KAMs) and audit fees in the Chinese context. Furthermore, this study moderates the characteristics of the dual-board system (board of directors (BOD) and supervisory board (SB)) on the association between KAMs and audit fees. Design/methodology/approach The ordinary least squares (OLS), fixed effects (FE), and random effects (RE) were applied using a final sample of 17,286 firm-year observations from 2017 to 2022 to test the hypotheses. We relied on the instrumental variable using the two-stage least square (IV-2SLS) method and generalized method of moments (GMM) to address the endogeneity issue. Findings Our results show a positive and significant relationship between KAMs and audit fees. These findings indicate that audit fees are related to compliance with the requirements of China Standards on Auditing (CSA) No.1504 KAMs. Furthermore, our results indicate that factors such as board size, the level of board independence, and the size of the SB positively and significantly reinforce the association between KAMs and audit fees. However, the outcomes depict that SB independence has a significant and negative effect on the association between KAMs and audit fees. In contrast, the findings reveal that chief executive officer (CEO) duality does not have a statistically meaningful impact on the relationship between KAMs and audit fees. Finally, the robustness tests support the main findings and confirm their validity. Research limitations/implications Our paper focuses solely on the total number of KAM topics, while future studies could investigate how specific types of KAM disclosures, such as those related to revenue recognition, accounts receivable, and goodwill impairment, which are the most frequently reported KAMs, influence audit pricing in the Chinese context. Practical implications This study has theoretical and practical importance for regulators, auditors, practitioners, shareholders, and academics. For example, it can help regulators gain a clearer understanding of the impacts of the new Chinese auditing standard (CSA No. 1504) on audit fees. Social implications This study offers significant social implications by emphasizing the role of audit transparency and unique governance structures in protecting stakeholder interests, improving public trust in audit reports, and supporting economic development. Originality/value Our empirical findings provide novel evidence that contributes to the recent inconclusive literature on the impact of KAMs on audit fees. To the authors’ knowledge, this study provides the first empirical evidence in China that explores the moderating role of the dual-board system characteristics on the relationship between KAMs and audit fees.

The accounting of revenues and expenses related to the operation and maintenance of real estate in housing cooperatives is regulated by statutory provisions as well as internal cooperative regulations. The Act on Housing Cooperatives defines the general principles for charging fees covering the costs of operating and maintaining both individual properties and cooperative-owned assets, but it does not specify detailed rules for fee calculation or accounting procedures. These issues are therefore regulated by the cooperative’s statute and internal regulations adopted by cooperative bodies, most often the supervisory board. The purpose of this paper is to analyze the legal and organizational framework governing the settlement of operating costs, revenues, and expenditures related to property maintenance and repair funds in housing cooperatives. Particular attention is paid to the role of internal regulations in shaping accounting practices and the requirement to maintain separate records for individual properties. The analysis demonstrates that effective and compliant cost and revenue accounting in housing cooperatives requires the integration of statutory requirements with internally adopted rules and procedures.

Background: This study examines how Sharia Supervisory Boards (DPS) communicate their religious governance roles in Islamic banks across Southeast Asia. Method: Using a comparative qualitative approach, the analysis is based on DPS reports, regulatory frameworks, and AAOIFI governance standards from 2020 to 2024. Results: The results show regional convergence in core disclosure elements such as annual Shariah opinions, religious framing, and formal oversight statements. Malaysia and Brunei demonstrate the highest narrative detail and transparency, while Indonesia employs concise doctrinal reporting and Thailand presents minimal disclosure. The study reveals that DPS communication serves as a hybrid mechanism combining spiritual accountability, procedural assurance, and legitimacy construction. Variations across countries are shaped by institutional maturity, regulatory environments, and the strength of governance expectations. These findings contribute to a nuanced understanding of how Shariah governance is performed through narrative reporting in Southeast Asian Islamic banks. Conclusion: This study examined how Dewan Pengawas Syariah (DPS) express and communicate their religious governance roles across Islamic banks in Southeast Asia by analyzing formal DPS reports and related governance documents from Indonesia, Malaysia, Brunei Darussalam, and Thailand. The findings show that DPS consistently construct their role through a combination of devotional language, compliance declarations, and the articulation of oversight responsibilities, reflecting a shared foundation of Islamic accountability. While religious expressions vary in richness and placement, all jurisdictions employ them to signal ethical integrity and alignment with divine and public expectations. Oversight narratives likewise form a core part of DPS communication, although the depth of disclosure differs substantially across countries. Collectively, these patterns reveal that DPS reports function as both spiritual statements and institutional instruments of governance

This study examines the regulatory framework, contractual structures, and legal challenges of conventional and sharia equity crowdfunding as alternative financing mechanisms for Micro, Small, and Medium Enterprises in Indonesia, with comparative insights from Malaysia. The research employs a normative legal methodology analyzing primary legal instruments including Indonesian Finance Authority Regulation, and related regulations, supplemented by empirical literature examining crowdfunding implementation in both jurisdictions. The findings reveal that Indonesia operates a dual regulatory framework combining securities regulations with Islamic jurisprudential guidance, while Malaysia pioneered ECS licensing in 2015 with ongoing debates regarding Sharia governance depth. Conventional equity crowdfunding employs standard share subscription agreements under corporate law, whereas sharia equity crowdfunding utilizes Islamic contracts including musharakah, mudharabah, qardh hasan, and ijarah to ensure compliance with prohibitions against riba, gharar, and maysir. The study identifies three significant legal issues: regulatory gaps particularly concerning sharia share offering provisions and Sharia Supervisory Board responsibilities, cybercrime vulnerabilities affecting unregistered platforms comprising approximately ninety percent of sharia operators, and money laundering risks through electronic payment mechanisms. The research further demonstrates that religious investors significantly influence crowdfunding success, with Islamic campaigns attracting 37.1 percent higher funding based on empirical evidence from comparable markets. The study concludes that effective sharia crowdfunding development requires statutory-level legislation, enhanced Indonesian Finance Authority Regulation supervision of unregistered platforms, mandatory cybersecurity standards, comprehensive Sharia governance frameworks with separate review, audit and risk functions, and targeted financial literacy programs. These recommendations aim to bridge the gap between sharia principles and positive law while expanding MSME access to equity-based financing aligned with maqasid al-Shariah objectives.

Financial performance is a key indicator of success for banking institutions, particularly in the context of managing profitability, debt structure, and the implementation of Good Corporate Governance (GCG). Although numerous studies have highlighted the role of financial performance in sustaining banking competitiveness, empirical research that specifically examines the effects of profitability and debt on financial performance while considering the moderating role of GCG quality in the Indonesian banking sector remains limited. This study aims to analyze the influence of profitability and debt on financial performance and to assess the role of GCG quality as a moderating variable in these relationships for banks listed on the Indonesia Stock Exchange over the 2010–2023 period. The study employed a quantitative approach using secondary data from financial reports, yielding 266 observations selected through purposive sampling. Data were analyzed using multiple linear regression with the aid of SPSS software. The results show that profitability, measured by Return on Assets (ROA), does not have a significant effect on financial performance, which is measured by Return on Equity (ROE), whereas debt, measured by the Debt to Equity Ratio (DER), has a positive and significant effect on financial performance. In addition, GCG quality, proxied by the presence of the Sharia Supervisory Board (Dewan Pengawas Syariah, DPS), has a positive effect on financial performance and strengthens the relationships between the financial variables and firm performance. These findings underline that appropriate debt management and high-quality GCG implementation are critical factors in enhancing banks’ financial performance. The implications of this study encourage banking management to continuously strengthen corporate governance in order to support long-term improvements in financial performance.

Purpose This paper aims to investigate the influence of clan culture on gender diversity within the top management teams of Chinese firms. Design/methodology/approach This paper analyzes data from Chinese companies listed on the A-share markets from 2003 to 2022. Findings We find that stronger clan culture is associated with lower female representation in leadership roles, including positions on the board of directors, supervisory boards and among senior executives. Cross-sectional tests reveal that this negative relationship is more pronounced in state-owned enterprises compared to non-state-owned enterprises. Additionally, we identify mitigating factors: regions with higher economic development and greater foreign cultural influence are less likely to hinder female advancement into top management. Lastly, our analysis of the mechanisms by which clan culture perpetuates gender inequality perceptions underscores its harmful effects on both the demand for and supply of female labor in executive roles. Originality/value In recent years, the topic of gender diversity within corporate boardrooms, executive ranks and the workforce at large has garnered considerable attention. Despite extensive research on the determinants of gender diversity and its impact on firm outcomes, the influence of informal institutions, such as culture, on gender diversity within organizations remains an understudied area. This gap is especially pronounced in the context of China, where cultural norms and values deeply influence gender roles and dynamics. Our paper aims to enrich the discourse on gender diversity by exploring the impact of clan culture, a fundamental element of Chinese culture, on the gender diversity of top management teams in Chinese firms.

The growth of the Islamic banking industry in Indonesia is increasingly significant, but the financial performance of several Islamic banks still shows fluctuations, especially in terms of profitability and problematic financing. One factor that is believed to play a role in creating financial stability and sustainability is the implementation of Islamic corporate governance (ICG), especially the role of the Sharia Supervisory Board (SSB). This study aims to analyze the effect of the number of SSBs on the financial performance of Islamic commercial banks in Indonesia, using data from 13 Islamic banks listed on the Indonesia Stock Exchange (IDX) during the 2020–2023 period. The method used is multiple linear regression, with financial performance indicators in the form of capital adequacy ratio (CAR), return on assets (ROA), non-performing financing (NPF), financing to deposit ratio (FDR), and operating expenses to operating income (beban operasional pendapatan operasional, BOPO). The results show that the number of SSBs has a significant positive effect on profitability (ROA) and a significant negative effect on NPF. This finding aligns with Mollah and Zaman (2015), who stated that “a better Sharia supervisory board’s effectiveness could increase Sharia compliance in Sharia banks” (p. 418). This study emphasizes the urgency of strengthening the role of the SSB in supporting financial stability and Sharia compliance of Islamic banks in Indonesia.

This study analyzes the implementation of fintech technology in online financing in Islamic banks, focusing on operational efficiency and compliance with sharia principles. Using secondary data from the February 2025 LPBBTI Statistics published by the Financial Services Authority (OJK), this study applies descriptive statistical analysis and trend analysis to assess the impact of fintech on the performance of Islamic banks. The results show that the implementation of fintech improves operational efficiency and expands access to financing services, despite the decline in some financial indicators. Challenges related to sharia compliance were also found, especially in fintech products that potentially involve riba and gharar. This study suggests the importance of a deeper study of sharia fintech regulations in Indonesia, strengthening the role and competence of the Sharia Supervisory Board to ensure sharia compliance in the implementation of fintech in Islamic banks.

Although the implementation of Islamic legal principles in the practice of Islamic financial institutions (LKS) has attracted scholarly attention, studies that specifically link supervisory mechanisms, particularly the role of the Sharia Supervisory Board (Dewan Pengawas Syariah, DPS) to substantive sharia compliance in the context of limited customer sharia literacy and strong business-oriented pressures remain scarce. This study aims to analyze the implementation of Islamic legal principles and supervisory mechanisms in relation to sharia compliance in LKS. It adopts a qualitative approach with a field research design, involving key informants comprising LKS managers, DPS members, and customers selected through purposive sampling. Data were collected through in-depth interviews, observations, and document studies, and were analyzed through data reduction, data display, and conclusion drawing, using source and method triangulation to ensure the validity of the findings. The results show that the principles of justice, transparency, and the prohibition of riba are implemented through the use of sharia contracts (akad-akad syariah), transparent disclosure of information regarding services and fees, and internal supervisory mechanisms that involve the DPS in document review, product compliance evaluation, and the provision of corrective recommendations. However, sharia compliance has not yet become substantively robust, as it is constrained by limited Islamic economic literacy among some customers and by business orientation pressures that tend to steer compliance toward formal administrative fulfilment. This study contributes to the development of the concept of sharia compliance from the perspective of fikih muamalah and sharia supervisory governance, and deepens understanding of the dynamics of applying Islamic legal values in LKS. The findings underscore the importance of strengthening sharia literacy, enhancing the capacity and independence of DPS, and ensuring consistent sharia compliance audits, while recommending that LKS managers and regulators/stakeholders reinforce customer education, standardize supervisory practices, and mitigate commercial pressures so that they align with the objectives of maslahah (public benefit).