Group Project Report Shariah Audi 1 
GRADUATE SCHOOL OF MANAGEMENT
FIN 6650
Accounting and Control for Islamic Institutions
Group Assignment:
“Issues and Challenges of Shariah Audit: Post IFSA 2013 Establishment”
Prepared for: Assoc. Prof. Dr. Noraini Mohd. Ariffin
Prepared by:
Siti Azrai Binti Ahmad Akil G1019578
Mirzohid Nizamidiniv G1124429
Asaad Mohamed G1311795
Table of Contents
ABSTRACT 3
CHAPTER ONE 4
INTRODUCTION 4
1.1 BACKGROUND OF THE STUDY 4
1.2 RESEARCH QUESTIONS 5
1.3 RESEARCH OBJECTIVES 6
CHAPTER TWO 7
LITERATURE REVIEW 7
2.1 History of Auditing 7
2.2 Shariah Audit and Maqasid al Shariah 8
2.3 Conventional Auditing versus Islamic Auditing 9
2.4 Audit Practitioners in Malaysia 9
2.5 IFSA 2013 10
CHAPTER THREE 11
RESEARCH METHODOLOGY 11
3.1 INTRODUCTION 11
3.2 RESEARCH METHODOLOGY 11
CHAPTER FOUR 12
FINDINGS & ANALYSIS 12
4.1 Issues and challenges before IFSA 2013 12
4.2 Issues and challenges after IFSA 2013 13
CHAPTER FIVE 16
CONCLUSION AND RECOMMENDATIONS 16
5.1 RECOMMENDATIONS 16
5.2 CONCLUSION 16
References 18
ABSTRACT
Institutions that offer Islamic financial products and services are expected to operate by the Islamic principles and all activities must be within the Shariah rules. Shariah audit is a way to ensure that the operations of Islamic financial institutions (IFIs) do not have conflict with Shariah principles. Internationally, the AAOIFI (Accounting and Auditing Organizations of Islamic Financial Institutions) and the IFSB (Islamic Financial Services Board) have issued a number of governance standards and guidelines to govern the practitioners in IFI. However, in the context of Malaysia, Bank Negara Malaysia (BNM) also has issued guidelines to provide well-advised regulations of Shariah affairs for Islamic financial institutions. Nowadays, the age of globalization and business is seen as the guiding factor for our social and economic life. In other words, accounting is the most important tool of business acting as a language of
FIN 6650
Accounting and Control for Islamic Institutions
Group Assignment:
“Issues and Challenges of Shariah Audit: Post IFSA 2013 Establishment”
Prepared for: Assoc. Prof. Dr. Noraini Mohd. Ariffin
Prepared by:
Siti Azrai Binti Ahmad Akil G1019578
Mirzohid Nizamidiniv G1124429
Asaad Mohamed G1311795
Table of Contents
ABSTRACT 3
CHAPTER ONE 4
INTRODUCTION 4
1.1 BACKGROUND OF THE STUDY 4
1.2 RESEARCH QUESTIONS 5
1.3 RESEARCH OBJECTIVES 6
CHAPTER TWO 7
LITERATURE REVIEW 7
2.1 History of Auditing 7
2.2 Shariah Audit and Maqasid al Shariah 8
2.3 Conventional Auditing versus Islamic Auditing 9
2.4 Audit Practitioners in Malaysia 9
2.5 IFSA 2013 10
CHAPTER THREE 11
RESEARCH METHODOLOGY 11
3.1 INTRODUCTION 11
3.2 RESEARCH METHODOLOGY 11
CHAPTER FOUR 12
FINDINGS & ANALYSIS 12
4.1 Issues and challenges before IFSA 2013 12
4.2 Issues and challenges after IFSA 2013 13
CHAPTER FIVE 16
CONCLUSION AND RECOMMENDATIONS 16
5.1 RECOMMENDATIONS 16
5.2 CONCLUSION 16
References 18
ABSTRACT
Institutions that offer Islamic financial products and services are expected to operate by the Islamic principles and all activities must be within the Shariah rules. Shariah audit is a way to ensure that the operations of Islamic financial institutions (IFIs) do not have conflict with Shariah principles. Internationally, the AAOIFI (Accounting and Auditing Organizations of Islamic Financial Institutions) and the IFSB (Islamic Financial Services Board) have issued a number of governance standards and guidelines to govern the practitioners in IFI. However, in the context of Malaysia, Bank Negara Malaysia (BNM) also has issued guidelines to provide well-advised regulations of Shariah affairs for Islamic financial institutions. Nowadays, the age of globalization and business is seen as the guiding factor for our social and economic life. In other words, accounting is the most important tool of business acting as a language of
References: 1. Dr Muhammad Yusuf Saleem (2013), “Islamic commercial law”, John Wiley & sons Singapore Pte.Ltd, pp 3-4 2 3. HishamYaacob& Nor Khadijah Donglah(2012), “Shari’ah Audit in Islamic Financial Institutions: The Postgraduates”, International Journal of Economics and Finance; Vol. 4, No. 12; 2012 4 7. Malaysian Business (2013), “Shariah audit in Islamic Banking and Finance”,17 December. 8. Nawal Kasim and Zuraidah Mohd Sanusi (2013),“Emerging issues for auditing in Islamic Financial Institutions: Empirical evidence from Malaysia”, IOSR Journal of Business and Management, Vol 8, Issue 5, pp 10-17 9 10. Nawal Kasim, Zuraidah Mohd Sanussi, Tatik Mutamimah, SigitHandoyo (2012), “Shariah Auditing: An Extended Scope of Auditing in Islamic Financial Institutions”19 December 2012 11