Purpose This paper aims to propose a governance-focused framework for integrating artificial intelligence (AI) into the internal Shariah audit (ISA) of Islamic banks in Malaysia. Grounded in the Resource-Based View, it explains how AI enhances ISA effectiveness, efficiency and transparency by improving audit quality, timeliness and compliance while preserving Shariah authenticity, ethical accountability and organisational capability through technology, auditor competence, adaptability and regulatory alignment. Design/methodology/approach A conceptual methodology synthesising theoretical perspectives, regulatory guidelines and existing literature is adopted. Grounded in the Resource-Based View and guided by Malaysia’s Operational Risk Reporting framework, this study proposes a layered AI-integrated ISA governance model aligning technological capability, auditor competence, and institutional oversight to enhance Shariah audit effectiveness. Findings This study demonstrates that AI has the potential to transform ISA from a periodic manual process into a continuous assurance mechanism that enhances efficiency, transparency and accountability. Effective implementation depends on technological readiness, auditor competence and adherence to Shariah principles. The framework advances four interrelated enablers of AI-integrated ISA effectiveness: AI infrastructure, Shariah interpretation, organisational adaptation and regulatory alignment. Research limitations/implications This study extends the Resource-Based View by framing ISA as a strategic capability integrating human expertise, technological infrastructure and governance alignment. It offers practical guidance for Islamic banks seeking to implement AI responsibly to strengthen audit quality, compliance and stakeholder trust. As a conceptual framework, this study invites future empirical research to validate and refine the proposed model across different regulatory contexts. Originality/value This paper introduces a governance-based conceptual framework that integrates AI into internal Shariah audit through a Resource-Based View lens, bridging digital innovation with Shariah governance. It advances existing literature by moving beyond technical AI models to provide a structured capability-based approach that strengthens compliance and preserves ethical legitimacy in Islamic financial institutions.
Raza et al. (Tue,) studied this question.