External Sharia Audit
Leading organizations are seeking our Sharia Compliance Audit to provide assurance to their Islamic stakeholders. Our practice underpins the trust of Islamic stewardship between your company and those who wish to see an honest view of the implementation of Sharia compliance in your firm.
Licensed by the Central Bank, we take deep personal accountability both, individually and as a team, to deliver exceptional external Sharia Audit service and value to your Islamic financial business.
Why choose Us?
- Extensive Shari Audit experience: We lead the Sharia Audit for both local businesses and across the GCC. In Saudi Arabia alone we serve 26% of the Saudi Investment Companies licensed by the CMA, 25% of the Financing Institutions licensed by SAMA and 23% of the Co-operative Insurance firms listed on the KSA stock-exchange. We thoroughly understand the challenges Companies face in planning and maintaining Shari Compliance. Given our exposure to the region we understand what makes the pertinent regulations unique, and have a clear understanding of the AAOIFI Sharia compliance framework within which the Islamic businesses operate.
- Proven Track record in International Markets: Outside the Middle East we have conducted Sharia Audit for multiple sectors at various levels of the financial industry including clients from US, UK, Canada, France, Switzerland, Kazakhstan, Cameroon, Hong Kong and Australia. We have also been the Sharia Auditors for the Islamic ETF of Washington based Falah Capital– the first of its kind to be listed on the New York Stock Exchange.
- The right Sharia Auditors with the right knowledge: We place great value on ensuring that our Sharia Auditors are qualified in the science of Sharia and Islamic jurisprudence. Our diverse team of hard working Bahraini’s and expats from Germany, Russia and Sri Lanka have studied in top universities such as Al Azhar, Dar-ul-uloom, Islamic University of Medina and INCEIF (Malaysia) and are knowledgeable, client-focused professionals who understand local Sharia compliance regulations.
- Delivering Value by verifying SSB Control: The governance of Sharia Supervisory Board (“SSB”) approvals has never been more important. In today’s Sharia compliant business environment, there is more scrutiny and skepticism of SSB’s review, approval and supervisory methodology than ever before. Local and international investors now expect greater reliability, more oversight and clear evidence of internal Sharia controls. We can help meet these expectations by auditing the completeness and accuracy of information contained in SSB’s certification and supervisory procedures – in light of AAOIFI Sharia standards – using a control based approach.
- An efficient, risk-based approach: Our continuous engagement at all levels of the business has provided us the ability to deeply understand systematic Sharia procedures & internal control mandates and Sharia product exercises within institutions. As part of our external Sharia Compliance Audit practice, our approach will specifically be tailored to identify and address significant risks in the your Company’s financial make-up, business processes, internal controls, product manuals, governance and perform substantive tests to get an understanding of the relevant issues and the Sharia operations behind them.
Our commitment to Sharia and integrity demands that we remain vigilant in ensuring our external Sharia Audit complies with changing regulations and applicable AAOIFI Sharia Audit standards, and has us in the forefront of adopting the new rules intended to rebuild confidence in Sharia Compliance. To meet this we have, over the years, designed our methodology to meet all applicable national standards, and guide us in our goal of bringing the Islamic businesses locally and internationally a high quality, independent and rigorous independent Sharia Audit. Our approach allows us to interact with management and Sharia compliant officers to understand the business products, processes, Sharia policies, Sharia controls, SSB Certification system, and Sharia compliance reporting issues.
We test the Sharia control environment using substantive procedures, effective risk assessment and rigorous control examination: What Sharia risks can affect non-permissible captions? What Sharia audit procedures address these risks? Where is the greatest risk for Sharia contravention? How effective are internal Sharia control measures at mitigating these risks? Are the SSB’s review and approval systematized in calculated balance way? Does the internal Sharia control unit record the rules, guidelines and parameters of Sharia businesses, processes and offerings correctly?
Our Progress over the Years
Below is a timeline of our historical progression in scaling up the Shari Audit practice from the early years of our establishment:
Beginnings: The roots of independent Sharia Audit practice | 2004 – 2006
In 2004, with the rise of Islamic finance, the inefficiency of Sharia Audit became a target of supervisory concern. SRB drew on its founders heritage, and navigated through the course of developing its own methodology for both internal and SSB Sharia Audit practice. Process by process, we found ways to simplify the practice and increase the Sharia Supervisory efficiency for both the functions.
The development of modern day Sharia Compliance Audit | 2007 – 2008
With the deepening economic crisis of 2007, Islamic Finance spawned a new type of enterprise in the GCC. Qatar based Safa Bank was a famous early Islamic establishment who turned to SRB to conduct its independent Sharia Compliance Audit. The experience was so valuable that the Islamic bank recommended compulsory independent oversight on behalf of the SSB. In the absence of any regulation this recommendation helped us gradually implement our own procedures and control measures, but years passed before the Islamic industry started to speak about the need for such a practice.
Resilience, outstanding quality service and commitment built exceptional engagements in different countries in the GCC. Arab Bank, widely considered as the region’s leading bank selected SRB to manage and oversee the Sharia Supervisory Board Audit for its UAE and its Qatari division.
Designing Sharia audit functions in the absence of regulations | 2009 – 2012
In 2009, pushing the boundaries of thought leadership, we wrote a detailed paper on the problems of Sharia compliance implementation and offered an integrated approach to solving them through the introduction of an independent external Sharia Audit strategy either at a national or quasi-private level. This paper also received recognition from world renowned scholar such as Shaikh Taqi Usmani and helped SRB draw more engaging experiences from different players of the industry.
A new area of external Sharia Audit was soon to generate enormous discussion for Islamic financial professionals—the era of true independent Observance. Ensuing discussions compelled us to continue upgrading our own practice for the three important functions, namely, Sharia Supervisory Board, internal and external Sharia Audit. To this end, we segregated the three functions.
The new era of Reporting Sharia Compliance | 2012 – 2014
SRB scaled its growth as more organizations like SEDCO Capital, Ibdar Bank and Tadhamon Capital offered a rapid compounding of Sharia Compliance audit value for years to come. To drive operational excellence SRB sharpened its focus on its Sharia Audit Reports to give greater confidence and assurance to shareholders and portfolio investors in the Middle East.
Without sacrificing clients confidentiality and technical Sharia Supervisory proficiency we became the first organization to create a reporting engine which would allow investors to check the status of their investments and their pertinent Sharia compliance Audits in real-time.
Inspiring Confidence in Sharia Compliance | 2016 and beyond
Following the natural progression of our Sharia audit journey from planning, to design and execution, SRB now seeks to better serve communities with the support of AAOIFI’s enhancing standards and continuing to study the new regulations being proposed round the world. The news pecifics of external Sharia Audit continue to be accommodated in our policies and procedures for Auditing Sharia Compliance.