Shariah Audit refers to the entire process of unbiased critical evaluation and examination of all the policies and operations of an organization in accordance with the Islamic Laws for Business.
It encompasses the timely and periodical review conducted to provide an independent judgment regarding the policies and investments of any firm in the light of the Shariah Standards.
The need for Shariah auditing arises when an organization is keen on continuing its Shariah Compliant products in accordance with the Shariah Principles.
The Shariah Audit is a function of reviewing and assessing the activities and policies of the organization to ensure the conformity with the Shariah guidelines laid down by the Shariah Advisory Board for the product being audited.
A thorough revision and examination need to be carried out to ensure that the products and services are strictly compliant with the Shariah principles.
The basic principles on which the Shariah Audit is based are the Shariah Standards and guidelines as may be prescribed by the Shariah advisory board or Industry bodies such as AOIFI.
Malaysia