Shari'ah Audit Framework

Currently, I am heading a research group to develop Shari'ah Audit Framework for Islamic financial institutions. This research group is part of ISRA (International Shari'ah Research Academy of Islamic Finance), a research arm of Bank Negara Malaysia (BNM). This Framework will then be considered by BNM to be implemented later, inshaallah. The Framework will complement the Shari'ah Governance Frameowrk recently issued also by BNM.

The Framework will address a number of issues such as Shari'ah risk management, Shari'ah internal control system, internal Shari'ah audit, and external Shari'ah audit. The research group has started work in September 2010, and we hope to complete the task latest by the end of February 2010. The proposed Framework will be subjected a number due process especially feedbacks from industry players who will be affected by the Framework.

On the 15th. and 16th. of December 2010, I will be involved in a Workshop on Shari'ah Audit for Islamic Finance to be organised by CERT (Centre for Research and Training), a local established training provider in Islamic finance in Malaysia. This Workshop hopefully will share with the participants the issues on Shari'ah governance and audit in a more focussed discussion.

Thanks.

My latest paper

My latest paper is recently published by Journal of Humanomics (Emerald) entitled "Islamic Microfinance: An Ethical Alternative to Poverty Alleviation". The paper discusses the various Islamic financing mechanisms that can be adapted for microfinance purposes. The mechanisms such as Mudarabah, Musharakah, Muzaraah, Musaqat, Ijarah, Murabahah, and Qardhul Hasan have been found to be viable and ethical alternatives to coventional microfinance based on interest (riba'). However, each microfinance mechanism has its own risk profile that need to be properly understood and mitigated. The paper argues that each mechanism can be identified and matched with the risk profile of the micro-entrepreneurs.

Anyone interested with the complete paper please email me at abdulrahim.iium@gmail.com or leave a comment here together with email address.

Abdul Rahim

My New Book

At last, my new book is ready. The contents of the book are as follows:

CONTENT OVERVIEW

1. ACCOUNTING & ISLAMIC WORLDVIEW

• Accounting and Its Environment • Islamic Worldview and

Accounting • Accounting Objectives: An Islamic Perspective

2. ACCOUNTING CONCEPTS: AN ISLAMIC PERSPECTIVE

• Conventional Accounting Concepts • Accounting Concepts and

Shari’ah Requirements

3. ISLAMIC ETHICS AND ACCOUNTING

• Ethics and Accounting • AAOIFI’s Code of Ethics for Accountants

• Incorporating Islamic Ethics in Accounting Education • Islamic

Ethical Principle of Maslahah and Accounting Ethics

4. FINANCIAL REPORTING FOR ISLAMIC FINANCIAL INSTITUTIONS

• AAOIFI FAS 1 • MASB FRSi-1 (As of 2010 MASB TRi-3)

5. ACCOUNTING FOR ISLAMIC DEPOSIT AND INVESTMENT ACCOUNT

• Principles of Wadi’ah Deposit and Accounting Implications •

Principles of Mudharabah Investment Account • Accounting Issues

on Mudarabah Investment Account • Specific Disclosure

Requirement

6. ACCOUNTING FOR MUDARABAH FINANCING

• Principles of Mudharabah Financing • Accounting for

Mudharabah Financing – AAOIFI FAS 3

7. ACCOUNTING FOR MUSHARAKAH FINANCING

• Principles of Musharakah Financing • Accounting for

Musharakah Financing - AAOIFI FAS 4

8. ACCOUNTING FOR MURABAHAH FINANCING

• Principles of Murabahah Financing • Accounting for Murabahah

Financing – AAOIFI FAS 2

9. ACCOUNTING FOR IJARAH FINANCING

• Principles of Ijarah • Accounting for Ijarah Financing

10. ACCOUNTING FOR INVESTMENT IN ISLAMIC SECURITIES

• Background of AAOIFI FAS 17 • Accounting Recognition

Requirements • Accounting Measurement Issues • Accounting

Disclosure Requirements

11. PRINCIPLES OF ZAKAT & ZAKAT ACCOUNTING FOR BUSINESS

WEALTH

• Zakat vs. Taxation • Fundamental Principles of Zakat • Zakat

Accounting on Business Wealth and Financial Assets

12. ZAKAT ACCOUNTING FOR ISLAMIC FINANCIAL INSTITUTIONS

• Accounting Standard on Zakat: AAOIFI FAS 9 • MASB TRi-1