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
Shaiful Amri Husain1200092
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).
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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
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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
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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.
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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)
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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
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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.
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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
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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’
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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:
18Corporate and Shariah Governance, Internal Control and Compliance