Introduction The article discussed about Audit in the Islamic framework has more extensive degree than the present practice due to the other perspectives and ideas implanted in Islamic regulation known as 'shariah '. The two principle issues that are identified with the shariah internal auditor while directing review of Islamic financial institutions. Shariah audit may just be characterized as an audit authentication for shariah regulation. In 1992, the Accounting and Auditing Organization for Islamic Bank and Financial Institutions (AAOIFI) was built up. The principle target of its foundation is to satisfy the requirements of Islamic banks and financial related organizations.
Members of the IIA are also members of The Institute of Internal Auditors Inc, the global professional body. This Code incorporates the Code of Ethics issued by the global body. Therefore, by applying the Code, members are also applying the global Code of Ethics. Purpose of the Code of Professional Conduct The code of professional conduct sets out the elements of professional standards and ethical considerations, which the Institute requires from members and shall be binding on all members of the Institute. It contains two principles adopted by the IIA - the overriding principle of professionalism - acting in the public interest - and the principle of treating people fairly and, from the Code of Ethics, an additional four principles and the rules of conduct.
Therefore, an auditor is not exclusively to satisfy the needs of an individual client. An auditor shall comply with the ethical requirement by the by-laws. However, auditor often faces ethical dilemma and ethical conflict during their work. An auditor is required to resolve a conflict in complying with the fundamental principles through the formal or informal conflict resolution process (By-Law s. 100.15). When initiating either a formal or informal conflict resolution process, several factor such as relevant facts, ethical issue involved, fundamental principles related to the matter in question, established internal procedures and alternative courses of action has to be considers to determine the appropriate course of action.
Therefore, modern banking institutions, which gradually became essential to the commercial activity of the entire world, were totally antithetical to the guidance revealed to humankind through the Qur'an and the Sunnah of the Prophet Muhammad (PBUH). Many Muslims, believing in the prohibition of interest, remained aloof from this modern system of banking, and those who did enter the field restricted themselves to the routine work necessary for their employment. This was done because they had reservations about interest-based transactions and also because, owing to their political decline, they were unable to control the wheel of international commercial transactions. RULES OF ISLAMIC FINANCE: The rules of Islamic finance adhere to the broad principles of avoiding Maysir and Qimar which are gambling and speculation along with Gharar which is uncertainty coupled with exploitation and unfairness. This closes the door to the concept of interest and precludes the use of conventional debt-based
A Critical Analysis of Independence of Internal Audit Function Abstract: Internal Audit Function has played in vital role in the organizations in the modern world. Internal audit functions helps in depicting out the fraud and errors that are created in the financial reports of the enterprise which creates risks for the organization. Henceforth, comes in the auditors responsibilities to carry out their relevant procedures with the documentations provided by the Management to gather information on how strong the organizations internal control system has minimized the fraudulent activities. The independence of the Internal Auditor therefore, is most important in the case
(Zukri Samat, nd). Islamic Bank has offered an alternative to conventional banking products and services, such as providing various credit facilities, trade finance, deposit taking, providing secure and maintain facilities and funds transfer based on Shariah or Islamic principles. For a 10 years period of time, Bank Islam Malaysia Berhad (BIMB) can operate without competition. This means that the Islamic bank is a bank that is allowed to offer Islamic banking products. (Ruzina Markon, 2009).
Internal audit function (IAF) act as a first line defense in corporate governance (CG) for checks and balances. Sometime, it has deeper understanding of current and have potentials role IAF in CG. Internal Audit (IA) provide a better future research and development on a new IAF. Example: role to ensure provides a quality of CG. CG consist of audit committee (AE), external auditor (EA), IAF and management.
In the past these ethical standards holds the futures of ethical guidance issued. But now has added more features and generally more stringent than preceding guidance. For example: the Internal Financial Accounting Code (IFAC), they base on principles rather than rules and highlight objectivity from the point of view of logical and knowledgeable third party. They fulfill with ethical principles issued by the European Commission (EC). Separately from the five ESs, APB also issued a statement of Provision Available for Small Entities
These rules and regulations include complying with the ethical standards of the profession as well. Selin et al. (2014) revealed that internal auditor’s compliance with ethical standards in most parts of the world except Latin America and Caribbean, is low with an average of 41% across the global
5. Principles and Issues of Islamic Advertisement By investigating the literature, it appears that most authors have very similar views on which principles should be followed to ensure Islamic advertisement. The findings in the previous chapter will be summarized in the following and presented as a compilation of principles that have their foundation in Islam and are backed by religious scripture. 5.1 Honesty and Deception Honesty represents the most essential aspect of Islamic business (Bedouin Story, Bari Abbas), and any kind of deception is condemned. Deception entails any dishonesty about a product’s benefits, features or the need the consumer has for it.