Audit is a process to investigate and verify an account, while Syariah is the rule of Islam (Hukum Islam). Therefore, Audit Syariah is the process to analyse, check, investigate and to make sure the operation and the management of Islamic Financial Institution (IFI) is accordance to the principal and the Syariah’s guidelines, mainly for the production of a product. Syarikah al-Rajhi al-Masrafiyyah LiL Istismar has define the Audit Syariah as “parties to determine the extent of Syariah compliant IFI based on decision made by the Syariah Advisory Council (SAC)”
* Is there any specific mechanism to ensure the implement decision of SAC based on the Muamalat Islam? * How the implement of contracts, requirements, and operation being monitored by the IFI? The importance of Syariah compliance is to mitigate the operational risk of IFI and to strengthen the internal control of Islamic Banking system. Operation risks arise out because of failure in internal controls relating to processed, people, systems, or external event. The syariah non-compliance significant with this risk, which may result in voiding of contracts, loss of income, withdrawals, diminishes reputation and reduction in business. So, key challenge in managing operational risk in Islamic banking is by ensuring syariah compliance. Therefore, it is important to have syariah auditor to control activities according the Islamic rules which permissible and compliance with the principles of syariah About audit syariah
The different between statutorily IFI of different countries against actual scope and scale of what constitutes syariah audit might be bias towards the actual nature and scope of syariah audit. Auditor that practices the syariah system should be understood as a model that those countries adopt probably due to certain constraint within their financial system or infrastructure. Primary scope of syariah audit is...