mga3033 course outline obe 1092013

1. NAME OF COURSE / MODULE AL-TADQIQ AL SHARI’E

2. COURSE CODE MGA3033

3. NAME(S) OF ACADEMIC STAFF NURAZALIA ZAKARIA

4.

RATIONALE FOR THE INCLUSION OF THE COURSE/MODULE IN THE PROGRAMME

This course is an introduction to Shariah Compliance Audit for Islamic Financial Institutions (IFIs) and intends to enhance student understanding on the main concepts and current issues in Shariah Auditing as there is limited exposure on this topic to students in the current education curriculum.

5. SEMESTER & YEAR OFFERED

6.

TOTAL STUDENT LEARNING TIME (SLT)

Face to face:

L T P O28 28 3

L=lecture ; T=Tutorial; P=Practical; O=Others (Exam)

Total Guided and Independent Learning:

120

7. CREDIT VALUE 120/40= 3 credit; 2+2

8. PREREQUISITE (IF ANY) nil

9. OBJECTIVES

1. To provide knowledge on the nature and needs for Shariah Compliance Audit as a measure to address Shariah Compliance Risk in Islamic Financial Institutions.

2. To increase students awareness on the roles and responsibilities of relevant regulators, authorities and organs of Shariah governance in relation to performing Shariah auditing in IFIs.

3. To provide insights on the annual report disclosure requirements of IFI based on respective regulations/standards/guidelines.

10. LEARNING OUTCOMES

At the end of the course, learners will be able to:1. Explain the nature and needs for Shariah Compliance audit as a measure to

address Shariah Compliance Risk in Islamic Financial institutions (LO6-EM2, A3)

2. Compare and contrast the roles and responsibilities of relevant regulators, authorities and organs of Shariah governance in relation to ensuring business operations are Shariah compliant. (LO1, C3)

3. Work in groups to analyse annual report for compliance to regulation/standards. (LO5-TS3,P3 )

11. TRANSFERABLE SKILLSStudent should be able to develop a good understanding of Shariah auditing framework, concepts and practices through a process of lectures, tutorial and group assignment/project.

12. TEACHING-LEARNING AND ASSESSMENT STRATEGY

Teaching-learning strategy: The course will be taught through a combination of formal lectures,

exercise, group work, using authentic materials, informal activities and various textbooks. Collaborative teamwork will be fosters throughout the course. The use of examination and internal reporting assessment will assess the student’s ability to apply theoretical concept in context.

Assessment strategy: Formative Summative

13. SYNOPSIS This course caters the aspects of auditing in the Islamic Financial Institutions (IFIs) including Islamic banks, Shariah-compliant fund management companies and takaful companies. This includes the needs for Shariah Compliance risk management in Islamic financial institutions in form of Shariah compliance audit practices. To begin with, students will be introduced to the relevant regulators and authorities in Shariah auditing environment. This course also discusses the roles and responsibilities of Shariah Advisory Council and internal auditors in relation to

performing Shariah auditing in Islamic financial institutions. Beyond the regulation requirements and conceptual framework of Shariah audit compliance, this course will cover the current issues in practicing Shariah Audit in IFIs in Malaysia.

14. MODE OF DELIVERY Lectures and tutorial (SCL)

15.Assessment methods and types

Component %Continuous Assessment

Group article review Mid Term Test Group Project Paper Presentations

10%10%20%10%

Final examination 50%Total 100

16.

Content outline of the course/module and SLT per topic

Topics

FACE TO FACE SELF-STUDY

TO

TA

L S

LT

Corporate Governance: Islamic Perspectives

2 2 0.52

0.53 10

Principles for Shariah Compliant 2 2 0.5 0.5 3 8Shariah Governing Bodies 2 2 0.5 3 0.5 3 11Shariah Governance Framework for IFIs

2 2 0.52

0.53 10

Shariah Committee Report 2 2 3 7Risk Management Strategies 2 2 3 7Risk Mitigation 2 2 3 7Shariah review and audit 2 2 0.5 1 0.5 3 9Audit Planning 2 2 1 3 8Audit Scope 2 2 0.5 1 1 3 9.5Audit Report 2 2 2 3 9Financial Reporting in IFIs 2 2 1 0.5 3 8.5Presentations 4 4 8 16

TOTAL 28 28 312

5 44 120

17 References

Textbook:1. Mustafa Mohd Hanefah, Zurina Shafii, Supiah Salleh & Nurazalia Zakaria,

2012, Governance and Shariah Audit in Islamic Financial Institutions, Penerbit USIM.

Other references2. Bank Negara Malaysia, 2010, Shariah Governance Framework for Islamic

Financial Institutions, BNM, Kuala Lumpur. 3. Abdul Rahim, 2008. Shariah Audit for Islamic Financial Services: The

needs and challenges paper presented at ISRA Islamic Finance Seminar Mandarin Hotel, Kuala Lumpur

4. Syed Alwi Mohamed Sultan, 2007, Shariah Audit for Islamic Financial Institutions – A Primer, CERT Publications.

5. Engku Rabiah Adawiah 2007, Shariah Framework for Shariah Compliance Review, Audit & Governance Workshop on Shariah Review, Audit and Governance for IslamicFinancial Institutions, Kuala Lumpur 30-31 January 2007.

6. Shahul Hameed, Ratna Mulyany 2007, Shariah Audit for Islamic Financial Institutions (IFIs): Perceptions of Accounting Academicians, Audit Practitioners and Shariah ScholarsPaper presented at the IIUM Accounting Conference, Gombak

Mapping of the course/module to the Programme Learning Outcomes

TOPICContact hours(week)

Lesson Learning Outcome(Students are able to…)

CLO KITeaching & Learning

ActivitiesAssessment

Tasks

Corporate Governance: Islamic Perspectives Concepts, meaning and importance

of corporate governance Types of corporate governance

models Importance of corporate

governance from Islamic perspectives

4(1)

1. Understand the concepts, meaning and importance of corporate governance.

2. Differentiate and analyze the different types of corporate governance models.

3. Understand the importance of corporate governance from Islamic perspectives

LO1 C3

o LectureoActive reading &

presentationW2: Grais & Pellegrini (Corp Gov & Shariah Compliance)

Feedback on active reading

Principles for Shariah Compliance Guidelines Foundations of

Islamic teaching Philosophies of

Islamic economy Principles of

Muamalat Primary and

secondary sources of Shariah Main rules of

Shariah in Fiqh Muamalat

4(2)

1. Explain the foundations of Islamic teaching

2. Summarise philosophies of Islamic economy

3. Elaborate on the Principles of Muamalat 4. Identify the primary and secondary

sources of Shariah5. Explain the main rules of Shariah in Fiqh

Muamalat

LO6LO5

EM2TS3


presentation

W3: Discussion of products offered by Islamic banks utilising fiqh muamalat principles

Feedback on group discussion

Shariah Governing Bodies Roles and

responsibilities of local and international regulatory bodies of Islamic Financial Institutions.

Shariah governance framework of Bank Negara Malaysia and Islamic Financial Services Board.

Governance standards issued by AAOIFI.

4(3)

1. Explain the roles and responsibilities of local and international regulatory bodies of Islamic financial institutions.

2. Compare and contrast the Shariah governance framework of Bank Negara Malaysia and Islamic Financial Services Board.

3. Summarise the salient points in the governance standards issued by AAOIFI.

LO5LO1

TS3C3


presentation

W4: IFSB 10 Corporate Governance VSBNM – compare Shariah Governance Framework

Feedback on active reading & presentation

Article review(w3): Asyraf Wajdi (CG & Stakeholder mgmt: Islamic perspective)

Shariah Governance Framework for IFIs

4(4)

1. Identify the main organs of an IFI’s Shariah governance mechanism.

LO1 o LectureoActive reading &

Feedback on active reading &

Main organs of IFI’s Shariah governance system

Roles and functions of the organs in the Shariah governance framework

Interrelationships among the important organs of the Shariah Governance Framework

2. Analyse the main roles of each of the parties involved in the Shariah governance framework.

3. Elaborate on the interrelationships among the important organs of the Shariah Governance Framework.

C3

presentation

W5: Find annual report of IBs takaful operators in Malaysia. Compare what information is reported on Shariah governance.

presentation

Shariah Committee Report Purpose and content of Shariah

Committee Report Improvements in content of the

Shariah Committee Report by Bank Negara Malaysia

Similarities and differences of the reporting requirements of Bank Negara Malaysia and AAOIFI on Shariah Committee Report

4(5)

1. Describe the main purpose and content of Shariah Committee Report.

2. Discuss the changes that BNM have made to the format and content of the Shariah Committee Report.

3. Compare and contrast between the requirements of Bank Negara Malaysia and AAOIFI on Shariah Committee Report

LO1 C3


presentation

W6: Zulkifli Hasan (Roles & Responsibility of Shariah Committee)


Risk Management Strategies & Risk Mitigation Three lines of defense

approach in risk management

Risk management processes in IFIs

Types of risks face by IFIs Risk management

techniques

4(6)

1. Identify and explain three lines of defence approach in risk management

2. Discuss the risk management processes in IFIs

3. Explain the types of risks related to the management of IFIs

4. Identify the risk management techniques applicable to each types of risk

LO1LO6

C3EM2


presentation

W7: Annual report disclosure on risk mgmt strategies & mitigation by IFIs – group presentation

Additional readings: Risk mgmt. in Islamic banking


Shariah review and audit Definition of Shariah Review

and Audit Similarities and differences

between Shariah Review and Shariah Audit

Area of responsibilities of Internal Audit function and External Audit in conducting Shariah Audit

4(7)

1. To define Shariah Review and audit.2. To compare and contrast between Shariah

Review and Shariah Audit3. To determine the area of responsibilities of

Internal Audit function and External Audit in conducting Shariah Audit.

LO5LO1

TS3C3


presentation

W8: Nurazalia & Zurina (2011) (Comparative analysis of Shariah review & audit)


Audit Planning Processes in Shari’ah audit

planning Materiality indicator in

Shariah audit practice Internal Control for Shariah

Compliance

8(8-9)

1. To identify the processes in Shari’ah audit planning.

2. To determine the materiality indicator in Shariah audit practice.

3. To develop understanding on the Internal Control for Shariah Compliance

LO5LO1

TS3C3


presentation

W9: Zurina Shafii & Supiah Salleh (2010) audit of Shariah internal control system

W10: review chapter on audit process


Audit Scope Audit scope in Shariah Audit

practices Components in the audit

scope

4(10)

1. To identify the audit scope in Shariah Audit practices.

2. To determine related components in the audit scope.

3. To develop an insight idea of the overall scope of Shariah Audit.

LO5LO1

TS3C3


presentation

W11: Sheila Ainon Yusoff (2013) Shariah audit framework


Article review (w10): Abdul Rahim Abdul Rahman 2008 (Shariah audit_needs & challenges)

Audit Report Main purpose and

content of Audit Report Similarities and

differences in the content of audit report in accordance to BNM and AAOIFI

Differences between the Auditor Report and Shariah Committee report

4(11)

1. To identify the main purpose and content of Audit Report.

2. To compare and contrast the content of audit report required by BNM and AAOIFI

3. To differentiate between the Auditor Report and Shariah Committee report.

LO5LO1

TS3C3


presentation

W12: current issues - Hisham Yaacob 2012 (issues and challenges of shariah audit)


Financial Reporting in IFIs IFI’s set of financial

statements Main components of the

Statement of Financial Position, Statement of Comprehensive Income and

4(12)

1. Describe the main financial reports that make up the IFIs Financial Statement.

2. Explain the main components of the Statement of Financial Position, Statement of Comprehensive Income and Statement of Changes in Equity

3. Compare the financial statement disclosure

LO5LO1

TS3C3


presentation

W13: Case study on Shariah audit – A to Z Transaction Processing


Statement of Changes in Equity

Comparison of financial statement disclosure requirement by MASB and AAOIFI

of IFI in accordance to MASB and AAOIFI

Tawarruq Commodity Murabahah

Industry sharing session/Project paper presentation

8(13-14)

1. Analyse the annual report of IFIs based on compliance to regulations/standards/guidelines.

LO5LO1

TS3C3

oPresentation & discussion of Project Paper

W14: Student presentation of group project

Feedback on presentation

mga3033 course outline obe 1092013

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