corporate and shariah governance, internal control and compliance

Corporate and Shariah Governance, Internal Control and Compliance

INCEIF

By

Shaiful Amri bin Husain1200092

Kumpulan Wang Persaraan (Diperbadankan) (KWAP)Malaysia

July 12, 2013June – August 2013

Shaiful Amri Husain1200092

Abstract

The Islamic Financial Institutions (IFIs) are obligated to ensure all transactions, products, and

services offered in accordance to the Shariah rules and principles. Hence, the risk of Shariah

non-compliance is unique to the Islamic Financial Institutions (IFIs) only. In order to manage

the risk, the Shariah governance has to be dealt with accordingly. Several guidelines and

standards such Shariah Governance Framework (SGF) and Islamic Financial Services Act 2013

(IFSA) were issued to provide guidance and assistance to the IFIs. The internal control

functions i.e. Shariah review, risk management, research and audit are been defined with their

unique roles and responsibilities to support the principles and pillars of Shariah governance.

Nevertheless, certain issues are yet to be dealt with under these guidelines. Hopefully,

progresses will be made in the future to strengthen the Shariah governance practices for IFIs in

Malaysia.

Key Word: Corporate Governance, Shariah Governance, Shariah Governance Framework,

Shariah Compliance, Internal Controls


Introduction

Corporate governance comprises of effective oversight, responsibility and accountability of

the key relevant governance agents. It promotes maximising the values of the shareholders

and other stakeholders in a manner that consistent with legal requirements and the highest

standards of integrity. Strong governance culture and values would bring confidence to the

general public and financial markets on the credibility of the Islamic financial operations.

Corporate governance of financial institutions for both Conventional and Islamic has unique

proposition to distinguish them from other sectors. Their uniqueness is due to the following

perspectives:

Financial institutions are generally more opaque than other sectors, which importantly

intensifies the agency problems;

Financial institutions are exposed to extreme regulations; &

Government ownership of financial institutions, makes the governance processes

different from other type of organizations (Vaseehar and others, 2005)

The operations of Islamic Financial Institutions (IFIs) have wider responsibility and

accountability than their conventional counterparts. The IFIs’ operations and transactions

must be governed by the Shariah rules and principles. As such, the major challenge to the

IFIs is Shariah non-compliance risk. Adequate internal systems and controls are required to

ensure compliance with the Shariah i.e. the rulings and fatwa of Shariah Advisory Council

(SAC) of Bank Negara Malaysia (BNM) and Shariah Committee been implemented

throughout the IFIs. Shariah risk management system and internal control should

supplement the external and internal Shariah audit requirements (Prof. Dr. Abdul Rahim).

Apart from compliance to the Shariah rules and principles, the financial products offered by

IFIs are mostly embodied with equity participation and profit loss sharing basis. This

requires greater transparency, responsibility and accountability from the customers,

regulators and IFIs itself. Failure to observe these principles may consequently lead to loss

of confidence in IFIs and overall financial sector. (Elsa & Bala).

1Corporate and Shariah Governance, Internal Control and Compliance


The supervisory and regulatory authorities have put additional burden for internal control

systems to monitor and supervise the roles of all players within the banking system. Good

culture would promote robust internal control systems that enhance the operational of

Shariah governance.

This paper would evaluate the roles of positive corporate cultures in infusing the

effectiveness of corporate and Shariah governance. The paper then examines the practices of

Shariah governance as practiced by IFIs in Malaysia. The core components of Shariah

governance, the issues faced by the industry players and the impacts of issuance Islamic

Financial Services Act 2013 (IFSA) are elaborated in details. Any shortcomings in the

Shariah governance practices are highlighted and recommendations are put forward.

Good Corporate Culture Promotes Effective Shariah Governance

The governance process is the conduct, actions or decisions that at least in compliance to the

laws, rules, codes and regulations of local jurisdiction which the financial institutions been

operated. It disregards the society acceptability and its outcomes may result in more harm

than creating value to the stakeholders.

As such, implementing sound corporate governance requires more than fulfilment of laws

and regulations only. It requires a form of self-regulation to ensure the operational and

strategic actions are directed towards creating values to the stakeholders. Positive corporate

culture will inspire the financial institutions to formulate sound corporate culture. Ethics and

integrity are part of the good corporate culture. It encourages the financial institutions to

accept, support and fulfil corporate governance principles (Irwan).

Especially for Shariah governance, two broad concepts exclusively to the IFIs are been

proposed to re-assure the stakeholders that:

The activities undertaken fully complied with Shariah principles; and

IFIs maintain and improve growth and are able to prove efficiency, stability and

trustworthiness.

The Islamic teachings advocate good virtues in every Muslim. The concepts of amanah

(trust), khalifah (vicegerent), ikhtisab (accountability) and ibadah (worship) are some of



values the pious individual must have. Meanwhile, the core component propelled Shariah

governance is human capital. As such, it can be deduced that the pious individual can be one

of the factors contributes to the effectiveness of Shariah governance.

Apart from human capital, there are other factors need to be considered for sound Shariah

governance which includes:

robust regulatory and supervisory framework;

in-depth research and database management to enhance Shariah governance knowledge;

and

innovative product and business development process

Practices of Shariah Governance in Malaysia

The established standard and governance bodies such as Accounting and Auditing

Organisation for Islamic Financial Institutions (AAOIFI) and Islamic Financial Services

Board (IFSB) have dedicated and contributed enormous effort to the Shariah governance

development. Their contributions include research, development and issuance of best

practices, guidelines and standards (Syed Alwi, 2007).

Presently, there is no universally single recognised best model for Shariah governance. The

whole process is still undergoing a learning curve, hence it is common to have gaps in the

implementation phase.

Nevertheless, the fundamental responsibility must reside with the local regulatory authority.

According to Jeroen, the followings are the guiding principles for the IFIs in Malaysia:

BASEL Committee on Banking Supervision – enhancement of capital adequacy ratio

of the IFIs

Islamic Financial Services Board (IFSB) – enhancement on Shariah governance

process

Bank Negara Malaysia (BNM) – various guidelines and standards issued under purview

of supervisory and regulatory framework

Institute of International Finance (IIF) – recommend principles of conduct and market



best practices

Bank Negara Malaysia (BNM) as the apex supervising and monitoring authority for IFIs in

Malaysia, has issued Shariah Governance Framework for Islamic Financial Institutions

(SGF). SGF is to be read together with other corporate governance guidelines such as

Guidelines on Corporate Governance for Licensed Islamic Banks (GP1-i) etc.

Malaysia adopts the 2-tiered Shariah governance. SAC is the first component of Shariah

governance. It is the final authority in matters relating to Islamic financial-related services.

Its decisions and resolutions are also binding to the court or arbitrator.

For second component, the Shariah Committee is established at each and every IFI. Their

responsibilities and functions are to deliberate and make decision on Shariah-related matter at

IFI level. It plays the complementary roles for SAC.

Key points of SGF

As no standardised Shariah governance practice among the IFIs in the world, BNM has

formulated SGF providing the general guidelines and principles in implementing Shariah

governance in Malaysia. The main thrusts highlighted are:

Oversight, accountability and responsibility: clear demarcation on accountability and

responsibility of the Board, Shariah Committee and Management

Independence: The independency of Shariah Committee shall be recognised by the

Board

Competency: The Shariah organs shall possess the necessary knowledge and skills in

performing the functions

Confidentiality and consistency: Duty to observe the confidentiality of information

obtained during performing their duties

According to Mohd Faiz Azmi (2011), it has clarified certain grey matters pertaining to the

Shariah governance. The major points in SGF are as follows:

Comprehensiveness. The framework is comprehensive and provides guidance on

Shariah audit, Shariah review, Shariah risk management and Shariah research function.



Shariah scholars. Strict requirements in terms of qualification and independence of

Shariah scholars.

Number of Shariah Committee members. Minimum of 5 members are required.

Conflict resolution. Rules are in place to manage risks of conflict.

Enhanced role of Shariah Audit. Need to cover more than Shariah risks in products

and services. Must look at framework, scholars’ decision process, risk management and

other key infrastructure areas.

SGF is developed to enhance the role of the Board, Shariah Committee and management in

relation to Shariah matters. The functions relating to Shariah review, Shariah audit, Shariah

risk management and Shariah research are been outlined to expand and clarify their

responsibilities and roles. A model structure of roles, functions and reporting relationships of

Shariah compliance functions is put forward for IFIs to comply with (BNM, 2010).

The components of Internal Controls

The purpose of internal controls is to support human capital within the organization in

managing risk and achieving established and communicated objectives of any organisation.

Internal controls are management’s responsibility and requiring participation of all

employees within the organization to be effective (Syed Alwi, 2007).

Generally, the Shariah governance comprises three (3) layers of protection against non-

compliance. Each layer has different roles and responsibilities to support the Shariah

framework. Failure of either layer may result in non-conformity to Shariah rules and

principles. The protection layer are as follows:

First Line – Operational Management (responsible for ongoing oversight of risk and

control at day to day work level)

Second Line – Shariah risk management, Shariah review, Shariah Compliance unit

(establish and maintain Shariah risk management framework, assessing, monitoring,

reporting and controlling risk on a bank wide level)



Third Line – Shariah Audit (provide independent assurance to Board of Directors and

Senior Management that the risk management and internal controls are adequate and

working effectively)

The followings are the diagram of inter-relational of core components of internal controls:

Shariah Risk Management Function

The Shariah risk management function is to support and provide the pillars of overall Shariah

compliance framework. Its functions are to identify, measure, monitor and control Shariah

non-compliance risks, so as to mitigate any possible non-compliance events. Thus, the IFIs

are able to run its operations and activities effectively without exposing to unexpected levels

of risk. The process is rather to optimize the risk reward equation, instead of minimizing the

loss.

IFIs are encountered two risk types: Generic to all financial institutions and Unique to IFIs

only. As such, Shariah risk management is not to be viewed on isolated cases. It must be

part of integrated IFI’s risk management framework (Dr. Mohamad Akram).

The risk of Shariah non-compliances is sources from three (3) perspectives: non-compliance

process/activities, non-compliance product and defect in documentation. This could impact



the financial and non-financial positions of the IFIs.

The functions of Shariah risk management involve the followings:

Facilitating the process of identifying, measuring, controlling and monitoring Shariah

non-compliance risks inherent in the IFI’s operations and activities;

Formulating and recommending appropriate Shariah non-compliance risk management

policies and guidelines; and

Developing and implementing processes for Shariah non-compliance risk awareness.

Shariah Review Function

The main purpose of Shariah Committee is to advise the Board and Management on the

operations of banking business. This is to ensure the elements of Shariah non-compliance

not existed. In addition, they also act as liaison body for Shariah-related issues between the

IFIs and SAC.

In assisting to discharge the duty of Shariah Committee, the Shariah review team is to report

directly to the committee on the Shariah-related matters. They entail in the examination and

review of Shariah concepts and Islamic structures based on specific guidelines of respective

IFIs. The fundamental requirement is to conduct regular assessment of Shariah compliance.

Unlike Shariah Audit to provide assessment from independent view, Shariah review team is

part of Management and their assessment is based on self-appraisal. Among others, they

conduct the appraisal on the followings:

the transaction conducted in accordance to the Shariah rules and principles;

the new product, transactions and service conform to Shariah rules; and

conform the calculation of zakah by external auditor.

Shariah Research Function

SGF has taken the lead to define methodically the role of internal Shariah research function.

The other governance bodies are yet to recognise the Shariah research function as an integral

part of the Shariah governance components.



The internal Shariah research team, comprising qualified Shariah officers and related Islamic

business operations officers, are to undertake the role of research, consulting and advisory.

This includes conducting pre-product approval process of new products, in-depth researching

on Shariah-related issues and vetting the documents for submission to the Shariah

Committee. With assistance of Shariah secretariat, the Shariah research is to ensure proper

deliberation and dissemination of the Shariah Committee decisions.

Shariah Audit Function

Prior to issuance of SGF, the functions of Shariah audit and Shariah review are used

interchangeably, resulting in both have overlapping roles. Nevertheless, the internal audit

department has undertaken to assume the roles of Shariah audit. IFIs approach the internal

Shariah audit according to their understanding and consequently, the practice and scope of

Shariah audit function varying from one IFI to another IFI (Yazkhiruni and Nurmazilah,

2012).

The definition provided in SGF is “the periodical assessment conducted from time to time, to

provide an independent assessment and objective assurance designed to add value and

improve the degree of compliance in relation to the IFI’s business operations, with the main

objective of ensuring a sound and effective internal control system for Shariah compliance”

Shariah audit is to be performed by the internal auditors, who have acquired adequate

Shariah-related knowledge and trainings. They shall be proficient in applying the approved

auditing guidelines and accounting standards. Expertise of IFI’s Shariah officer could be

engaged as long as the objectivity of the audit is not compromised.

The introduction of SGF has brought clarity on Shariah governance structure in particular

Shariah audit. This would attain greater confidence from the general public and financial

markets on the integrity of IFIs to uphold Shariah rules and principles. SGF emphasises the

Shariah auditors to provide independent assessment and objective assurance in periodical

basis to add value and improve the degree of Shariah compliance in relations to the IFI’s

business operation.

The Shariah audit function has direct reporting line to the Board Audit Committee and

indirectly to the Shariah Committee. The Audit Board Committee shall consult with the



Shariah Committee pertaining to the audit deliverables, which must be consistent with the

accepted auditing standards.

Furthermore, the Shariah auditing is accorded to be equal to the Hisbah, an institution

institutionalised during early years of Islamic era to promote the concept al-amar bil na’ruf

wal nahyu an al-munkar. Hence, Shariah auditing should not be accorded as worldly

corporate governance practices only, but a religious obligation of the IFIs as well.

The Issues of Shariah Governance

The implementation of Shariah governance is not smooth-sailing. Various issues impeded the

effectiveness of Shariah governance are noted. Some of the issues are as follows:

1. Financial Statement Accounting.

The Shariah audit scope includes examining and reviewing the financial statement of IFIs.

Generally, the IFIs engage the external auditor to conduct the financial statement audit.

However, there is no statutory requirement for external auditors to undertake the review of

Shariah audit, over and above the normal financial audit that they undertake.

Presently, the scope and assessment activities of Shariah compliance employed by auditors

are not standardised among the IFIs. This has resulted in various practices conducted by the

external auditors. In addition, the Malaysian Accounting Standard Board (MASB) has

pronounced its plan to fully converge with International Financial Reporting Standards

(IFRS) accounting. It was assured that the IFRS accounting would not be in conflict with

Shariah principles and rules. However, as IFRS not taken into account Islamic principles in

formulating its standards, various accounting issues not in compliance to the Shariah

principles were noted (ISRA, 2012). This has resulted in auditor’s dilemma to report the

matter as non-compliance or stick to the MASB’s pronouncement on acceptability of IFRS

for reporting the Islamic transactions.

2. Conflict management between Shariah Committee and Audit Committee

The Shariah Committee shall refer to the audit deliverables to provide opinions on the IFIs’



status of Shariah-compliance. As the internal Shariah audit has wider scope, there is

possibility that Shariah Committee may perceive the Shariah audit function is inadequate to

provide such assurance. The Shariah Committee could communicate their view to the Board

Audit Committee on the matter.

However, should the Board Audit Committee not agreeable, a conflict may arise. Since SGF

provides no clarity on the dispute resolution process, it shall impede the Shariah Committee

to discharge their duties effectively. According to a survey conducted by PwC in 2010, most

of Chief Internal Auditors (CIAs) been interviewed agreed that the dispute resolution is

lacking in the current framework.

The issue is exacerbated based on a finding of another survey conducted by Yaskhiruni and

Nurmazilah in 2012. All internal audit departments under review have no dedicated Shariah

unit to specifically perform Shariah auditing. The Shariah auditing is performed by all

internal auditors within the department when they conducted certain Islamic banking

products or operations. They admitted that the conduct of Shariah auditing still at minimum

and been leveraged from conventional audit approach. In addition, most of the Board Audit

Committee’s members are not well versed in Fiqh Muamalat or Usul Fiqh. As a result, their

deliberation on any Shariah-related matters may not be sufficient to deliver resolutions.

3. Harmonisation of Shariah rules

Presently, there is lack standardised Shariah rulings within the same jurisdiction and among

various regions. Due to this, the same issue may be considered as non-compliance in one

jurisdiction while others are acceptable to them. The main reason of diversity is the different

interpretation by four (4) mazhabs in Islamic jurisprudence. In addition, the inconsistencies

of judgement across IFIs are also noted. This has created confusion to the general public as

well as difficulty to cross-implement the Shariah products and services.

Nevertheless, various governance bodies have been attempted to tackle the matters. They

have issued various standards and guidelines for IFIs worldwide. In reality, the diversity of

judgement is less widespread than might be perceived.



4. Independence of Shariah Committee

The Shariah Committee is obligated to submit the Shariah compliance report in the Financial

Statement. Independency of Shariah Committee is important to instill public confidence on

the IFIs. As their employments are paid by the Management, the independency maybe

compromised to the certain extent. The Management shall exert pressure on the Shariah

Committee members to act in favour of them. For example, some transactions restrict IFI to

engage in certain profitable transactions which may result in poorer overall financial

performance. Under the circumstances, the Management may incline to use their leverage to

influence the Shariah Committee members’ decision, producing often known as “Fatwa

Shopping” or “Shariah Advisory a’ la carte”.

Nevertheless, it is been argued that the Shariah Committee members are considered pious,

and guided by the Islamic values and ethics. Furthermore, the Shariah Committee members

are elected by the shareholders in the general assembly. This indicates the independency of

Shariah Committee against the Board of Director and Management of IFIs. Impairment to

independency is hopefully not materialised as it would damage and jeopardize the overall

integrity of IFIs (Wafik and Matteo, 2006).

5. Talents and Competency

Ideally, the Shariah Committee members must be well verse in both Islamic principles and

finance knowledge. In practice, it is challenging to find scholars good in both disciplines.

Furthermore, talent shortage is exacerbated with the BNM guideline not allowing Shariah

Committee member to sit in various IFIs, in order to avoid the conflict of interest.

At the same time, the IFIs have difficulty to employ personnel to fill-up Shariah governance

functions. With fast progression of Islamic banking worldwide, the demand for talent in

Shariah areas is huge. Presently, the employment market is unable to meet the demand of

such personnel. Hopefully, the government efforts to enhance Islamic knowledge

management and establishment of learning institutions shall provide the necessary talents to

meet the demand in the future.



6. Shariah Compliance Costs

Shariah compliance review shall cause additional costs borne by all market participants in

Islamic finance. The IFIs have to hire additional human capital to fill-up the roles of Shariah

governance functions. With the talent shortage issues, attracting and retaining the Shariah

talents are expensive affair.

In terms of product development, providing Shariah compliance assurance shall translate to

additional processes and costs. Take the hypothetical case of sukuk issuance. The additional

costs for issuer include hiring Shariah advisories, obtaining Islamic rating and additional

legal documentation cycles. The additional cost for the issuer may range anywhere between

quarter of a million to a million dollars. Comparing to issuance of conventional bonds, the

additional cost can be staggering.

Similarly, these issues could be extended to other financial products. One alternative

solution to reduce the cost is by distributing the costs over a wider number of transactions

(i.e. economies of scale). This can be induced via standardisation. Unfortunately, the

progress towards standardisation is slow and unconvincing. (Sayd and Mohammad, 2011)

7. Legal Status of Shariah Pronouncement

SAC of BNM is the apex authority for Shariah-related matters. Their decisions and

provisions shall be binding and mandatory to all IFIs in Malaysia. From legal perspective,

the rulings made are binding on both courts and arbitration. However, the Shariah courts in

Malaysia preside on disputes of domestic matters only. The power to preside on the Islamic

finance matters is still resided on the civil courts.

Generally, the judges of civil courts have no extensive knowledge of Islamic principles. The

written judgements made not in line with Islamic principles are possible. This is evidenced

in case between Dato’ Hj Nik Mahmud Daud and Bank Islam Malaysia Bhd (BIMB)

pertaining to Bai Bithaman Ajil (BBA) contract. The presided judge deduced that the

execution of the Property Purchase Agreement (PPA) and the Property Sale Agreement

(PSA) are part of the process required by the Islamic banking procedures. It was never the

intention of the parties to involve any transfer of proprietorship. Such statement is erroneous

from Islamic perspective, as BBA is under the category of trading contract.



Impact of Issuance of Islamic Financial Services Act 2013

Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA) were

issued effective from 1 July 2013. They amalgamate several separate laws to govern the

financial sector under a single legislative framework for the financial sectors respectively,

namely, the Banking and Financial Institutions Act 1989 (BAFIA), Islamic Banking Act

1983, Insurance Act 1996 (IA), Takaful Act 1984, Payment Systems Act 2003 and Exchange

Control Act 1953 which are repealed on the same date.

In particular to IFSA, it plays an important role to promote financial stability and compliance

with Shariah principles as well provides a comprehensive legal framework. This is to ensure

fully consistent with Shariah in all aspects of regulation and supervision, from licensing to

the winding-up of an institution. It is the culmination of efforts to modernise the laws that

govern the conduct and supervision of financial institutions in Malaysia to ensure that these

laws continue to be relevant and effective to maintain financial stability, support inclusive

growth in the financial system and the economy, as well as to provide adequate protection for

consumers.

The main improvement noted with regards to Shariah governance is the punishment over

non-compliance of the Shariah rules and principles. Under the previous Islamic Banking Act

1983, the Management is not accounted for any non-compliance matter. This has been

rectified under IFSA. The Shariah compliance and governance provisions specifically

covered under section 27 to Section 38 of IFSA. It sets out the expectation of BNM on

Shariah governance structures, processes and arrangements, duties and responsibilities of the

Board, management and Shariah Committee as well as Shariah compliance functions.

In order to ensure strict compliance to the Shariah, IFSA imposes severe punishment of non-

compliance to the Act. The Management is made accountable to any occurrence of non-

compliance. This is because the Shariah Committee has limited resources to ensure what

been approved been practiced by the Management.



Conclusion

Every components of the Shariah governance has major roles to play to ensure proper

compliance to the Shariah rules and principles. To guide and regulate IFIs, BNM has issued

SGF aiming to enlighten issues with regards to Shariah governance. The framework is to

complement or to repel certain acts and standards in order to strengthen the IFIs and to

provide confidence to the public.

The objective of SGF is to ensure IFIs in Malaysia operated in accordance with Shariah

principles via two-tier Shariah governance infrastructure. The 2nd tiered Shariah governance

comprising of the Shariah review, research, risk management and audit functions, is to

support the Shariah Committee oversight roles in Shariah matters.

Each function has been defined and outlined to enhance the pillars of internal controls. Apart

from Shariah audit, other functions are part of Management teams and provide the self-

assessment of Shariah compliance. They are assisting the Shariah Committee to discharge its

duties in regards to Shariah-related matters.

Meanwhile, the function of Shariah audit is to provide an independent assessment and

objective assurance on the compliance of the Shariah rules and principles. The audit

deliverables are to be presented to Board Audit Committee and Shariah Committee.

The introduction of SGF has clarified the functions of Shariah audit and review. It has

succeeded to harmonise certain work processes and flows of these two functions.

Though some improvements are recommended in certain matters which include:

roles of external auditors to audit the financial statement;

conflict management between Shariah Committee and Audit Committee;

harmonising the fatwa and Shariah rules;

Independence of Shariah Committee;

Talents and competency;

Shariah compliance costs; and

Legal status of Shariah pronouncements



From 1 July 2013, IFIs are mandatory to comply with IFSA, which spelt out specific

provisions to enhance and strengthen the practice of Shariah governance practices. The

major enhancement is to impose accountable to the Management to ensure Shariah

compliance.

As the SGF and IFSA are governed on IFIs in Malaysia only, the issues of different standards

and structures of Shariah governance globally is still remained. As such, there is an urgent

need for international standard-setters to develop and standardise a comprehensive Shariah

governance framework for IFIs.



REFERENCES

Standards

Bank Negara Malaysia (BNM). 2010. “Shariah Governance Framework for Islamic

Financial Institutions”. BNM Kuala Lumpur.

Government of Malaysia. 2013. “Islamic Financial Services Act 2013”. Kuala Lumpur.

Books

The INCEIF – Lecturers’ notes, guidance and reference

International Shariah Research Academy for Islamic Finance (ISRA). 2012. “Corporate

and Shariah Governance in Islamic Financial Institutions” In Islamic Financial System:

Principles & Operations: pp 681 – 724. Kuala Lumpur. ISRA

Vaseehar Hassan, Bala Shanmugam and Vignesen Perumal (Editor). 2005. “Corporate

Governance: An Islamic Paradigm”. Kuala Lumpur. University Putra Malaysia Press 2005.

Syed Alwi Mohamed Sultan. 2007. “Shariah Audit for Islamic Financial Institutions – A

Primer”. Kuala Lumpur. CERT Publications Sdn Bhd.

Research Study

Elsa Satkunasingam and Bala Shanmugam. “The Importance of Good Corporate

Governance for Islamic Banks”. Monash University Malaysia.

Jeroen P.M.M. Thijs. “Risk Management in Islamic Banking”. Bank Islam Malaysia

Berhad.

Yazkhiruni Yahya and Nurmazilah. 2012. “The Role of Internal Auditing in Ensuring

Governance in Islamic Financial Institution (IFI)”. Academic research study presented at 3rd

International Conference on Business and Economic Research (3rd ICBER 2012) Proceeding:

pp 1647 - 1648

Irwan Febianto. “Shariah Compliant Model of Business Entities”. University of

Padjadjaran. Indonesia.



Wafik Grais and Matteo Pellegrini. 2006. “Corporate Governance and Shariah

Governance in Institutions Offering Islamic Financial Services”. World Bank.

Sayd Zubair Farook & Mohammad Omar Farooq. 2001. “Shariah Governance for

Islamic Finance: Challenges and Pragmatic Solution”. Bahrain.

Slide Presentation

Mohammad Faiz Azmi. 2011. “Embracing Islamic Finance – Impact on Internal Audit”.

Kuala Lumpur: PricewaterhouseCoopers

Prof. Dr. Abdul Rahim Abdul Rahman. “Shariah Audit: A Comparative Perspective”.

International Islamic University Malaysia (IIUM) & Research Fellow of ISRA.

Assoc. Prof. Dr. Mohamad Akram Laldin. “Risk Management in Islamic Finance”.

International Shariah Research Academy for Islamic Finance.

Website

PwC. 2010. “Shariah Audits: Industry Insights”:

http://www.pwc.com/en_MY/my/assets/publications/Shariah-Audit(Secured).pdf. Accessed

July 1, 2013.


http://www.pwc.com/en_MY/my/assets/publications/Shariah-Audit(Secured).pdf


CHARTERED ISLAMIC FINANCE PROFESIONAL (CIFP)

PART 2

IB2003MANAGING ISLAMIC FINANCIAL INSTITUTIONS (JUNE 2013)

PROJECT PAPER ASSIGNMENT (Marking Scheme)

Student Name: _____________________________

Matrix No: _____________________________

Criteria Marks Allocation Marks Obtained

Ideas/ Analysis 20 marks

Research/ Support 10 marks

Organization & Coherence 10 marks

Style 5 marks

Mechanics 5 marks

Total Marks 50 marks

Out of 20% Marks

Overall Comment:

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Examiner:

Date:


corporate and shariah governance, internal control and compliance

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