This research aims to analyze the pivotal role of Shari'ah auditing in bolstering institutional transparency within Zakat and Waqf institutions, recognizing them as key non-profit entities with profound religious and social dimensions. Adopting a descriptiveanalytical methodology, the study synthesizes classical jurisprudential literature with contemporary frameworks, examining Shari'ah and accounting standards alongside relevant empirical studies. The findings demonstrate that Shari'ah auditing serves as a critical governance mechanism that facilitates financial and religious disclosure, strengthens institutional accountability, and mitigates information asymmetry between management and stakeholders. Furthermore, the results indicate a positive correlation between the efficacy of Shari'ah auditing and the level of institutional transparency. However, several challenges impede its full activation, most notably restricted independence, the absence of standardized frameworks, and a shortage of specialized expertise. The study recommends the necessity of developing robust Shari'ah audit frameworks, enhancing auditor independence, and institutionalizing periodic Shari'ah reporting to solidify institutional trust and fulfill the Maqasid al-Shari'ah (Objectives of Islamic Law).