AAOIFI’s Governance and Ethics Board (AGEB) has issued its Auditing Standard for Islamic Finance Institution (ASIFI) No. 6 “External Shari’ah Audit (Independent Assurance Engagement on an Islamic Finance Institution’s Compliance with Shari’ah Principles and Rules)”. This standard was finalized by AGEB after extensive discussions, due deliberations and industry consultations in the form public hearings and experts’ comments received in writing and with due input from the Shari’ah perspective.
The Chairman of the Board, Dr. Ishrat Husain commented, “This standard provides comprehensive guidance to professionals who perform external Shari’ah audits of Islamic Financial Institutions in line with the global best practices”. He further added “The Board recognizes that external Shari’ah audit is a crucial governance organ for the Islamic finance industry and therefore we hope that this standard would strengthen public confidence, enhance the quality and uniformity of practices, and harmonize the global IFIs auditing process. The Board would also wish to extend appreciation to the Institute of Chartered Accountants of Pakistan (ICAP) team who provided technical support for the project”.
The standard outlines the criteria for performing a direct external Shari’ah audit and an attestation external Shari’ah audit. It further specifies the subject matter and subject matter information and provides guidance on principal procedures and key considerations for such engagements. The standard also includes the reporting formats in preparing the external Shari’ah auditor’s report, in line with industry best practices.
The successful collaboration with ICAP on this project will continue to work on the detailed guidance in the form of an external Shari’ah audit manual, which will be issued separately.
This standard is effective for external Shari’ah auditors’ reports covering periods beginning on or after 1 January 2019 with earlier adoption permitted.
The issued standard can be accessed by CLICKING HERE