Advantages Of Shariah Auditing

Internal auditor has extended their occupation scope. The internal auditor not just go about as a player to guarantee corporate administration and additionally giving internal consultancy yet the part has been extended to perform Shariah audit in guaranteeing that the operations of the Islamic Financial Institution(IFI) are Shariah consistent.This prompt the issue of independence and objectivity, competency of the auditor and auditor's execution in performing new errand which has been sketched out in the Shariah Governance Framework (SGF) issued by Bank Negara Malaya.There is col between the "desirable" and the "current" subprogram of Islamic law auditing in the IFIs in Malaysia. The desirable practice is to lead Shariah auditing

The basic auditing model is imperfect since it makes auditors financially subject to organizations. The Western common model of morals reflected in the conventional accounting or auditing for the most part propose an arrangement of morals separated from religion . Its free enterprise methodology is inadmissible for the Islamic financial system, which, then again, puts high good values, decency and Maslahah of the Ummah (for the advantages of Muslim society) as among its standards. Thus, due to contrasts in the Islamic economic vision to those of Western economics ,Islamic financial aspects including finance, banking or accounting ought to be assessed within its own structure and utilizing its own particular criteria.
I propose that as far as the competency, let the Board audit committee and the Shariah committee of the IFI choose the suitable level of the Shariah auditor. I think the individual must be qualified in Shariah criteria. The Internal audit ought to have shariah foundation. Adequate is not enough. It must further expand on the shariah criteria. Not just the individual must have Shariah foundation. Accounting qualification is additionally important

Self-review threats may happen on the grounds that there is no clear line of partition of duty. Writing on internal audit independence pinpoints three variables that essentially add to the level of reviewer independence, 1) Clarity of meaning of the examiner's responsibilities,2) The position of the internal auditor inside of the establishment's hierarchical structure, and 3) The reporting structure.Haniffa (2010) raises the question of the Services Selection Board (SSB) independence as they are making fatwa and at the same time helping the shariah auditors in conducting shariah review or shariah audit. Obviously there is no clear line on the division of duty which is essentials for any great internal control practice. The Islamic Financial Institutions (IFI) need to re-evaluate of where they could obviously separate these roles to avoid the misperception of the partners on the Services Selection Board (SSB) and shariah auditors’