Research Study of External Sharia Audit, its Concepts, Scope and Practice in Islamic Banking Industry

ایکسٹرنل شریعہ آڈٹ کے تصور،دائرہ کار اور عملی طریقہ کار کا اسلامی بینکوں کے تناظر میں تحقیقی جائزہ

الملخص

Sharia compliance is one of the most important and distinctive feature of Islamic financial system. without commitment to sharia compliance, the Islamic financial institution might not only face financial loss by giving the earning of sharia non-complaint transaction in charity, but it might also adversely affect the credibility of the institution in the society which will ultimately damage the performance and profitably of the institution. To enhance sharia compliance environment in the financial institution and cover the sharia non-compliance risk, several steps has been taken by different standard issuing bodies for islamic financial institution’s along with the support of central banks of several countries. External sharia audit in also considered one of the important steps to improve the sharia compliance environment of the Islamic Financial Institution. In this paper, the Audit its history and different types of audit is discussed. The efforts made by different standard issuing bodies for islamic financial institution’s and central banks of various countries towards External sharia audit and relevant guidelines and instruction issued by them is also reviewed. It is observed that external sharia audit firms should focus on sharia trainings to improve sharia related expertise of its Auditors. Further the central banks may also advise minimum eligibility criteria for sharia auditors and may categorize Audit Firms on the basis of available resources and expertise in the field of sharia audit.