New report released at Global Islamic Economy Summit calls for annual sharia compliance auditing
“Ensuring and maintaining the integrity of the sharia is paramount to sustaining future confidence and growth in the Islamic finance sector,” Omar Shaikh, advisory board member at UKIFC, said. “By providing an additional check, external sharia audit will play an important role towards providing reassurance to scholars, financial institutions and customers.”
The “External Shariah Audit Report” was unveiled by the Islamic Finance Council U.K. (UKIFC) and International Shariah Research Academy for Islamic Finance (ISRA) after the organizations consulted with more than 35 practitioners across four countries.
“Various initiatives are being taken in different jurisdictions to ensure compliance and maintain the credibility of Islamic finance among stakeholders,” Dr. Akram Laldin, executive director of ISRA. “External sharia audit provides additional assurance — and it does so with greater independence than others.”
External sharia auditing means that each Islamic financial institution will need to undergo annual auditing by an independent party.
“We strongly believe that the next step in creating robustness in this industry and in safeguarding all relevant stakeholders is an appropriate external sharia audit framework — which many central banks, including the Central Bank of Bahrain, are considering introducing in the near future,” Dr. Ahmed AlShaikh, deputy director of the Bahrain Institute of Banking and Finance, said.