AUD 610

Shariah Audit

Shariah Principles
Are the foundation for the practice
of Islamic Finance through the
observance
of
the
tenets,
conditions and principles espoused
by shariah
Comprehensive compliance with
shariah principles would bring
confidence to the general public
and the financial markets on the
credibility of the Islamic finance
operations.

Shariah Audit
Shariah audit refers to the periodical
assessment and objective assurance designed
to add value and improve the degree of
compliance in relation to the Islamic Fin
Institutions (IFI) business operations, with
the main objective of ensuring a sound and
effective internal control system for Shariah
compliance.
The function shall be performed by internal
auditors, who have acquired adequate
shariah related knowledge and training.

Scope of Shariah Audit

Audit of fin statements of IFI. In the
event that the audit is undertaken by
external auditor, IFI has to be satisfied
that the scope of audit by the external
auditor with regard of shariah audit is
comprehensive.
Compliance audit on organizational
structure, people, processes and IT
systems.
Review of the adequacy of Shariah
governance process.

Process of shariah audit

Should cover:

Understanding the biz activities of the IFI

to allow for better scoping of an audit
exercise
i.e
understandability
and
relevance of activities.
Developing a comprehensive internal audit
program or plan. Shall include objectives,
scope, personnel assignment, sampling,
control and duration as well as establish
proper audit processes, policies and
procedures of IFIs operations.

Process of shariah audit

Obtaining and making reference to

relevant sources, including the Shariah
Audit Committees publish rulings, the
Shariah Committees decisions, fatwas,
guidelines, the shariah audit results and
internal Shariah checklist
Conducting shariah audit on a periodical
basis.

Process of shariah audit

Communicating results of any assessment

or findings arising from the Shariah audit
to the Board Audit Committee and Shariah
committee.
Providing recommendations on rectification
measures taken as well as follow up on the
implementation by the IFI.