Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia
The need to be in conformity with religious and ethical principles, or to be Shariah compliant, is the unique and distinctive feature of Islamic finance which sets it apart from its conventional counterpart. Islamic financial institutions (IFIs) are to be audited not only on financial performances b...
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| Format: | Article |
| Language: | English |
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International Institute of Advanced Islamic Studies (IAIS) Malaysia.
2013
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| Online Access: | http://irep.iium.edu.my/48849/ http://irep.iium.edu.my/48849/1/131-518-1-PB.pdf |
| _version_ | 1848783363681288192 |
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| author | Yussof, Sheila Ainon |
| author_facet | Yussof, Sheila Ainon |
| author_sort | Yussof, Sheila Ainon |
| building | IIUM Repository |
| collection | Online Access |
| description | The need to be in conformity with religious and ethical principles, or to be Shariah compliant, is the unique and distinctive feature of Islamic finance which sets it apart from its conventional counterpart. Islamic financial institutions (IFIs) are to be audited not only on financial performances but also on their adherence to Shariah precepts, including broader ethical and moral parameters. Currently there is no proper framework to govern the practice of internal Shariah auditing in IFIs. The recently issued Central Bank of Malaysia’s Shariah Governance Framework (CBM-SGF) has made it compulsory for IFIs to perform a regular internal audit of transactions, operations and information systems particularly at the product implementation stage to ensure a comprehensive compliance with Shariah. This has posed a challenge to Islamic banks and Takaful companies, to develop their own internal Shariah audit architecture and to train a new breed of internal auditors in the science and ethics of Shariah audit based on generalised guidelines under the new directive. This paper highlights persistent problems relating to inadequate auditing at the business operations level and prevailing issues in Shariah audit. Recommendations are made for the industry to adopt a common internal Shariah audit framework as a move towards standardisation and uniformity of audit practice.
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| first_indexed | 2025-11-14T16:20:10Z |
| format | Article |
| id | iium-48849 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T16:20:10Z |
| publishDate | 2013 |
| publisher | International Institute of Advanced Islamic Studies (IAIS) Malaysia. |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-488492016-07-18T00:43:40Z http://irep.iium.edu.my/48849/ Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia Yussof, Sheila Ainon HG1501 Banking The need to be in conformity with religious and ethical principles, or to be Shariah compliant, is the unique and distinctive feature of Islamic finance which sets it apart from its conventional counterpart. Islamic financial institutions (IFIs) are to be audited not only on financial performances but also on their adherence to Shariah precepts, including broader ethical and moral parameters. Currently there is no proper framework to govern the practice of internal Shariah auditing in IFIs. The recently issued Central Bank of Malaysia’s Shariah Governance Framework (CBM-SGF) has made it compulsory for IFIs to perform a regular internal audit of transactions, operations and information systems particularly at the product implementation stage to ensure a comprehensive compliance with Shariah. This has posed a challenge to Islamic banks and Takaful companies, to develop their own internal Shariah audit architecture and to train a new breed of internal auditors in the science and ethics of Shariah audit based on generalised guidelines under the new directive. This paper highlights persistent problems relating to inadequate auditing at the business operations level and prevailing issues in Shariah audit. Recommendations are made for the industry to adopt a common internal Shariah audit framework as a move towards standardisation and uniformity of audit practice. International Institute of Advanced Islamic Studies (IAIS) Malaysia. 2013-01 Article PeerReviewed application/pdf en http://irep.iium.edu.my/48849/1/131-518-1-PB.pdf Yussof, Sheila Ainon (2013) Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia. Islam and Civilisational Renewal, 4 (1). pp. 80-102. ISSN 2041–871X E-ISSN 2041–8728 http://www.iais.org.my/icr/index.php/icr/article/view/131/127 |
| spellingShingle | HG1501 Banking Yussof, Sheila Ainon Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia |
| title | Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia
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| title_full | Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia
|
| title_fullStr | Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia
|
| title_full_unstemmed | Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia
|
| title_short | Prospects of a Shariah audit framework for Islamic financial institutions in Malaysia
|
| title_sort | prospects of a shariah audit framework for islamic financial institutions in malaysia |
| topic | HG1501 Banking |
| url | http://irep.iium.edu.my/48849/ http://irep.iium.edu.my/48849/ http://irep.iium.edu.my/48849/1/131-518-1-PB.pdf |