The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), in collaboration with Meezan held a workshop on its exposure draft on Internal Shari’ah Audit standard.

The workshop was aimed at discussing significant issues that are so far received from the public on the exposure draft. The Secretary General of AAOIFI, Mr. Omar Mustafa Ansari, presented the standards to over 40 participants including Shari’ah scholars, internal Shari’ah audit professionals, Islamic banking and accounting professionals, among others. Mufti Irshad Ahmad Aijaz, Chairman, Advisory Board of State Bank of Pakistan chaired the workshop, while Mr. Farhan Usmani, Head of Shari’ah Audit & Advisory Department, Meezan Bank welcomed the workshop participants.

The exposure draft on ‘Internal Shari’ah Audit’ builds upon the earlier standard (Internal Shari’ah Review issued in June 1999) and provides improved guidance on the subject. The document prescribes the compliance, quality control, ethical requirements, objectives and organizational structure along with the professional requirements with regard to the principal procedures, documentation, and reporting for internal Shari’ah audit.

Issues such as reporting line of internal Shari’ah audit function, interaction with the Shari’ah Supervisory Board (SSB), independence of internal Shari’ah audit function, fit and proper criteria, the difference between Shari’ah audit and Shari’ah compliance functions, outsourcing of internal Shari’ah audit function and other significant issues were discussed and deliberated upon.

Mr. Ansari expressed appreciation to Meezan Bank for hosting the workshop, and also to industry experts for their active participation. He said, “it is very important to have a deeper and expert-level discussion to evaluate public feedback received so far on the exposure draft on internal Shari’ah audit standard. The workshop provided an opportunity to interact with professionals who are directly impacted by the proposed standard and is expected to help make internal Shari’ah audit practices more robust, practical and better compliant with Shari’ah principles.”

Industry feedback and the outcome of the workshop will further be taken to the AAOIFI governance and ethics board (AGEB) further discussion and deliberation before the issuance of the final standards.

Those interested in providing comments on the exposure drafts of the Internal Shari’ah audit may still do so by emailing governance@aaoifi.com