SHARIAH AUDIT FOR ISLAMIC
BUSINESS BANKING
13th – 15th October 2014
KUALA LUMPUR
Key Highlights:
• Understand the Shariah control, compliance and audit systems in Islamic financial institutions
• Analyse key risk and audit areas in Islamic business financing
• Facilitate in developing a Shariah audit programme for different financing structures and facilities
• Identify potential obstacles, pitfalls and areas of improvement in the overall Shariah audit and control
process
• Understand the Institute of Internal Auditors (IIA) standard and guidance for a Shariah audit approach
• Apply the principles of Quality Assurance Review (QAR) for Shariah audit
Expert Course Director
YB Senator Dato’ Dr. Asyraf Wajdi Dusuki
Former Head of Research Affairs, International Shariah Research
Academy for Islamic Finance
President, Yayasan Dakwah Islamiah Malaysia
Nik Shahrizal Sulaiman
Special Offer
25%
Discount on a sin
gle 1-year
subscription when
conﬁrming
your place on thi
s course
*terms and condition
s apply – see back
Executive Director
PricewaterhouseCoopers (PwC) Malaysia
Visit www.islamicfinancetraining.com today or call +603 2162 7800 for more information
Course Introduction
One of the most important requirements for Islamic financial institutions (IFIs) is to carry out their activities in accordance with
the principles of Shariah. In this regard, it is essential to have a comprehensive, robust and well-functioning Shariah control
system to ensure that all products and services approved and provided by the IFIs are widely recognised as being Shariah
compliant, not only at the point of approval or ratification, but also in terms of ongoing operations.
Correspondingly, a sound Shariah audit system must be in place to forensically examine the institution’s performance on a
regular basis and identify incidences of incorrect or incomplete transactional flows, with the aim of rectifying and improving
performance in a continual and sustainable manner. A Quality Assurance Review (QAR) is also necessary as a strategic
assessment to consider the efficiency, productivity and impact of the internal audit department of the organization.
This is very much in line with the fundamental needs of a financial institution to follow necessary Shariah, governance, and
ethical standards, just as it must adhere to the financial and regulatory standards of its jurisdiction.
Islamic Finance Training presents a three day workshop exclusively designed to provide comprehensive and practical
knowledge on Shariah compliance review, audit and governance for Islamic banking and finance. It will also highlight the
relevant scope, procedures and potential issues in developing an effective Shariah audit programme. Delegates will also
learn the application of the principles or QAR and the IIA standards for a Shariah audit approach.
Expert Course Director
YB Senator Dato’ Dr. Asyraf Wajdi Dusuki was currently appointed by His Majesty the King as the member of the Senate,
Parliament of Malaysia. He is also the President/Yang DiPertua of Yayasan Dakwah Islamiah Malaysia (YADIM), elected
by the Prime Minister, Datuk Seri Najib Tun Razak. Prior to that he was the Head of Research Affairs at the International
Shariah Research Academy for Islamic Finance (ISRA). Apart from serving YADIM, he also serves as a Shariah consultant and
advisor to several financial institutions and advisory firms including Maldives Capital Market Development Authority, AIA AFG
Takaful Berhad, London-based Mortgage Company Chain Mender Limited, London-based Halal Industries PLC, US-Based
Islamic Financial Institution United Chartered Bank (UCB) and Singapore-based IFIS Business Advisory Pte Ltd. He was also the
Independent Director of Affin Islamic Bank from 2008 to May 2014 and sat as member of Affin Bank Group Shariah Committee.
On the academic front, he is a member of Board of Studies for Islamic Finance Programme at International Islamic University
Malaysia (IIUM), University Utara Malaysia (UUM), University Tun Abdul Razak (UniRAZAK) and Associate Fellow at ISDEV,
University Sains Malaysia (USM). He holds Master of Science degree in Islamic Economics, Banking and Finance and Ph.D in
Islamic Banking and Finance from Loughborough University, United Kingdom. He has published in numerous international and
local refereed academic journals. One of his article entitled “Banking for the Poor: The Role of Islamic Banking in Microfinance
Initiatives” has been awarded as the 2009 Outstanding Paper Award by the well-known International Referred Journal Article
Publisher Emerald Literati Network. In 2011, he was also conferred with Global Islamic Finance Award for the category “The
Most Upcoming Personality in Islamic Finance” in Oman Islamic Economic Forum
Nik Shahrizal has over 12 years of experience in the financial sector, both in the UK and in Malaysia. He specialises in the area
of Islamic finance and is part of the firm’s Global Islamic Finance Team (GIFT). Nik was the Project Lead for a Shariah audit
engagement in one of the largest banks in Malaysia. He has been involved in the Shariah Audit initiatives for PwC, involving
Shariah audit, discussion with the regulators and industry players on the Shariah audit framework. In addition, Nik has also
been involved in a number of assurance and advisory engagements for Islamic banks. This includes financial due diligence
for the acquisition of an Islamic bank in the region, strategic assessment of a new Islamic bank set-up and Basel II assessments
for two major Islamic banks in the country. He has also performed an operational assessment for a conventional bank’s
transition to an Islamic bank. His experience also includes review of the enterprise-wide risk management (ERM) framework
from a Shariah perspective - assessing the Shariah-related risks in the institution and embedding the Shariah risk assessment
process into the existing ERM framework for his client. Nik is a representative for the MASB Working Group Committee on
Islamic financial reporting and has contributed a number of articles on Islamic finance in the local media.
Course Agenda
Day 1
Fundamentals of Islamic Finance and Shariah Risk
• Overview of Islamic banking operation
• Shariah compliant framework
• Fundamentals of Islamic financial transactions
• Sources of prohibitions
• Theory of Islamic contracts
• Risk from Islamic perspectives
• Various types of risk
• Nature and impact of Shariah non-compliance risk
• Framework of addressing Shariah non-compliant risk
Shariah Audit and Governance Framework for Islamic
Banking
• Scope of Shariah audit
• Key considerations for Shariah audit
• Understanding established Shariah criteria
• Shariah audit process (Shariah audit vs. Shariah review)
• Various approaches to Shariah audit
• Shariah Audit Planning
• Principles in developing Shariah Audit Programme
• Preparing Shariah audit examination check-list
• Shariah audit reporting
• Significance of Shariah governance
Visit www.islamicfinancetraining.com today or call +603 2162 7800 for more information
Course Agenda
Shariah Audit Programme for Cash Line Facilities
• Revolving credit and overdraft
• Shariah principles underlying the Cash-Line facility
products
o Tawarruq structure
o Bay’ al-’Inah structure
o Murabahah structure
• Identifying Shariah audit areas for different structure of
Cash Line facilities
• Preparing a Shariah audit checklist
• Case studies
Shariah Audit Programme for Syndicated Financing
• Shariah framework of hybrid instruments
• Shariah guidelines on structuring syndicated financing
• Shariah principles underlying various models of
syndicated financing
o Mudarabah structure
o Musharakah structure
o Wakalah bil Istithmar structure
o Combo structures (Musharakah plus Istisnah plus
Forward Ijarah)
• Identifying Shariah audit areas for different structure of
syndicated financing
• Preparing a Shariah audit checklist
• Case studies
Day 2
Shariah Audit Programme for Project Financing
• Asset acquisition financing
• Contract financing
• Bridging financing
• Shariah principles underlying various project financing
• Identifying Shariah audit areas for different structure
of Project, Contract, Bridging and Asset Acquisition
financing
• Preparing a Shariah audit checklist
• Case studies
Shariah Audit Programme for Letter of Credit/Trust Receipts
• Various structures of Letter of Credit
o Letter of Credit based on Wakalah
o Letter of Credit based on Murabahah
o Letter of Credit based on Musharakah
o Trust Receipt based on Murabahah
• Discussion on Shariah and operational issues in various
LC and TR products
• Preparing a Shariah audit checklist
• Audit areas
• Case studies
Shariah Audit Programme for Islamic Accepted Bills
• Nature of banking Islamic Bill of Exchange
• Understanding Shariah issues
• Essential considerations in Shariah compliance review
and auditing for Islamic BE products
o Islamic Accepted Bills (Import) based on Murabahah
o Islamic Accepted Bills (Export) based on Bay’ al-Dayn
• Islamic Jurisprudence perspectives on Bay’ al-Dayn
(Sale of Debt)
• Identifying key Shariah audit areas for Islamic accepted
Bills
• Preparing a Shariah audit checklist
• Case studies
Shariah Audit Programme for Inwards and Outwards of Bills
for Collection
• Nature and structure of Inwards/Outwards of Bills for
Collection
• Wakalah-Based Bills for Collections
• Understanding potential Shariah issues.
• Identifying audit areas for different Inward/Outward Bills
for Collection
• Preparing a Shariah audit checklist
• Case studies
Shariah Audit Programme for Islamic Bank Guarantee (BG)
and Shipping Guarantee (SG)
• Nature of banking Bank Guarantee
• Understanding Shariah structures of BG
• Essential considerations in Shariah compliance review
and auditing for Islamic BG and SG products
o Bank Guarantee based on Kafalah
o Shipping Guarantee based on Kafalah
• Islamic jurisprudence perspectives on Kafalah bil Ujrah
(Fees imposed on Kafalah)
• Identifying key Shariah audit areas for BG
• Preparing a Shariah audit checklist
• Case studies
Day 3
Practical Issues in Shariah Audit for IFI
• Common operational pitfalls which result in Shariah non
compliance issues
• Embedding Shariah risk considerations into control
recommendations
• Working together with the Shariah review team towards
an effective Shariah audit
IIA Standards and Shariah Audit
• Leveraging on IIA standards & guidance for Shariah
audit approach
• IIA attribute requirements and Shariah audit
• Planning, fieldwork and reporting considerations for
Shariah audit
QAR for Shariah Audit
• Key requirements of QAR from the IIA perspective
• Applying the principles of QAR on Shariah audit
• Preparing for QAR: What should be prepared on
Shariah audit
Visit www.islamicfinancetraining.com today or call +603 2162 7800 for more information
Shariah Audit for Islamic Business Banking
13th – 15th October 2014, Kuala Lumpur
BOOKING DETAILS
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Pricing
1 delegate
RM 6,500
2 delegates
RM 11,050
3 delegates
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Early bird offer: registrations received before 30th September 2014 (or earlier) shall attract a 2.5% discount. No discounts shall be given to
registrations received after this cut-off.
Please note: A late booking fee of RM150 will be imposed on registration received within 14 days of the course start date.
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IFT1470/P