IFWMI won a SILVER medal for ITEX 2012 (23rd International Invention, Innovation & Technology Exhibition)on the 17th - 19th of May 2012, at KLCC with a submission of "Shariah
Governance And Audit In Islamic Financial Institutions" module.
This module was developed by IFWMI's researchers :
- Dr Zurina Shafii
- Prof. Dr. Hajah Mustafa Mohd Hanefah
- Nurazalia Zakaria
- Supiah Salleh
About the module :
1. Description of the Institute & Participants
Islamic Finance and Wealth Management Institute (IFWMI)
& Faculty of Economics and Muamalat,
Universiti Sains Islam Malaysia (USIM)
Bandar Baru Nilai, 71800, Negeri Sembilan
2. Type of Innovation
Teaching and training module
3. Description of the innovation
This module provides reading to a newly developed sub-discipline spinning off from auditing and Shariah governance. The advancement of Islamic finance industry requires a governance system that enhances the quality of delivery of Islamic financial products to cover the rights of shareholders and users of the products. Compliance to Shariah is the core value to the Islamic finance industry thus issued products tolerates nearly zero risk to Shariah breach. Shariah audit discipline is developed to ensure that requirements. The module contains necessary topics to understand Shariah governance and audit. The module is presented in five parts, i.e. corporate governance-Islamic perspectives, Shariah governance, Risk management in Islamic financial institutions, Shariah audit and review and Shariah audit processes.
4. Originality of the innovation
To the authors’ knowledge, this is the first module on Shariah governance and audit written. Few books were written on Islamic accounting and reporting of Islamic financial transactions, but none specifically address Shariah audit discipline. The module is an output for USIM research grant (Code: PPP/FEM/IFWMI-03-12809). The module is due for book publication by September 2012
5. Impact of the innovation
Shariah Audit has been introduced as one of the Shariah compliance functions in the Shariah Governance Framework (SGF) for Islamic Financial Institutions issued by Bank Negara Malaysia (BNM) on November 2010. Shariah audit function shall be performed by internal auditors of the IFIs, who have acquired adequate Shariah-related knowledge and Shariah audit skills. However, since at current there is no specific framework, standards or modules to address the Shariah audit practices thus, the impact of this innovation is the Shariah audit skills developed in the module that can be referred by the practitioners to perform Shariah audit functions as per SGF (BNM, 2010).
This module has been used in teaching and learning at the undergraduate level; Al-Tadqiq Al-Shar’ie (MGA 3033) and the other is at the post-graduate level; Halal Compliance Audit (MAD8023). The module is also features in a proposed Masters’ programme to be offered by the Faculty of Economics and Muamalat, Master’ of Accounting and Shariah Audit (MASA).
6. Practicality of its application
Shariah audit mechanisms and further development Shariah audit programme could be widely used in the Islamic finance industry especially during the audit of Islamic banks and takaful institutions. Shariah audit programme could be developed to provide input to a Shariah-compliant information technology system specially catering the Islamic financial institutions’ needs.
This module is a valuable tool to train future Shariah auditors in undergraduate and postgraduate courses as well as in the industry. The module content is useful for practitioners to guide them through the processes of conducting Shariah audit. The content could be used to develop a comprehensive Shariah compliant system to include governance and audit mechanisms in information technology system for Islamic financial institutions.