SALIHIN SHARIAH
Category   ARTICLE

 

Taking Accounting and Auditing beyond conventional Approach

 

The trend of Islamic finance over three decades globally has been judged as formidable alternative to conventional finance. While the former takes its source from Islamic principle, the latter is based on the man-made rules and regulations. Specifically, Islamic financial transactions are largely difference from conventional financial transactions based on the following factors:

 

Basis

Islamic Financial Transaction

Conventional Financial Transaction

Interest/Profit

  • The principle of return is based on profit sharing and forbids interest

 

  • The return is mainly based on interest.

Risk

  • This is based on risk sharing

 

  • This is based on risk transferring

Gambling

  • It forbids gambling

 

  • It incorporates gambling

Uncertainty

  • It forbids uncertainty

 

  • It involves a lot of uncertainty.

Governance

  • Shariah Board monitor and advise the Islamic financial institutions

 

  • Shariah Board is not part of the Corporate governance structure in conventional banks

Principles

  • Complies with Shariah rules and principles

 

  • Non-compliance in banking activities is not required

 

Nature of transactions

  • Islamic commercial contracts are the underlying contract of the transactions

 

  • Loan is the underlying contract of the transaction

Purpose of money

  • Money is medium of exchange not a commodity

 

  • Money is a commodity

 

The above issues have made accounting and auditing of Islamic financial transaction significantly different from that the conventional. Thus, there is need to fill the vacuum. The industry is in dire need of professionals with Shariah accounting and Shariah auditing services in order to support the ever-growing Islamic financial system.

 

So, where do you begin?

 

Our starting point is to creation of awareness with in-house training for our clients concerning the basic understanding of Islamic finance and Shariah Accounting and Auditing. The series of this training is already ongoing at SALIHIN across our offices in Malaysia.

 

How can SALIHIN be of help?

 

  • Our teams are capable and competent in the provision of Islamic accounting services;
  • We perform Shariah Agreed Upon Procedure (SAUP) on Mudarabah, Musharaka, Murabaha, Ijarah, Salam and Istina’a;
  • We perform review of Islamic financial transactions against the established standards;
  • Our professionals provide Shariah Accounting and Auditing Services for detection and treatment of impermissible financial transactions.

 

Services offering

 

Our specialists can help you overcome any challenges on Shariah Accounting and Auditing Services. Specifically, we can provide service in the following areas:

 

 Shariah Accounting Services

  • Provide comprehensive accounting services concerning trade-based and equity -based transactions. Help to resolving accounting issues concerning Takaful, Waqf, Sukuk, consolidation, foreign operations and transaction.

 Shariah review and audit service

  • We render external independent Shari’a audit and review of Islamic financial transactions.

 

 

 

 

 

 

 

Speak to us today

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