Services

Remote Sharia Audit

Remote Sharia Audit

Your Sharia Audit. Done Remotely, Anytime. Anywhere.

Trusted by financial institutions and investors worldwide, our Sharia advisory and Sharia audit services removes geographical boundaries and minimizes disruption to your business.

Managing Your Sharia Audit Remotely

Our digitally managed Sharia audits are designed to work remotely in a safe, secure and efficient way.

From collecting information to reviewing documentation to auditing transactions and issuing reports, our Sharia audit is underpinned with easy to use delivery model so as to provide you with a fast, accurate, safe and secure remote assessment.

Our audits comply with the requirements of relevant accreditation bodies, and we can provide remote Sharia audits against the following standards:

How does it work? 

Like physical Sharia audit, the remote Sharia audit centres around the scope selected for the underlying business, ensuring that the right Sharia audit evidence is procured, reviewed and tested in light of Sharia guidelines. Using desktop based reviews and applications our Sharia audit will consist of everything that is typically included in an onsite Sharia audit. Our Sharia auditors will guide you through the requirements and auditing process while live-streaming discussion with head of functions within your organization.

Details of your specific Sharia audit may vary, but the overall process will likely go as follows:

  • Remote Sharia audit planning
  • Communication with you on requirements and documentation details
  • Receiving relevant documents from you
  • Execute desktop-based assessment
  • Share observations on assessments
  • Hold video calls and correct any nonconformities
  • Issue draft report and collect feedback
  • Issue final Sharia audit report.

How it can benefit you?

Our remote Sharia audits can have multiple benefits in terms of efficiency, competence and access to scholarly expertise. Few of the benefits include:

Save time and money:
  • We reduce the cost of travel which also helps cut down on audit fee and waiting-times.
  • Availability of Sharia audit team(s) with required competence, connecting and including them in the Sharia audit where needed.
  • Enabling more transactions in sampling, thus increasing your insight and Sharia control on compliance.
Remove geographical boundaries: 
  • We serve clients in over 20 countries and our remote Sharia audit service means that our assessments can easily be delivered directly to you, no matter where you are in the world.
Global access to scholarly competence:
  • Additional competence or Sharia scholars can be added to any Sharia audit team in cost-efficient ways.
Mitigating business continuity risks:
  • Maintain business continuity under severe conditions, epidemics and pandemics.

 Why choose us?

Deep technical and Islamic financial Industry knowledge:

In the past 15 years we’ve audited banks, insurance firms, asset managers and fin-tech companies. We’ve certified their investments and offerings and applied Sharia auditing procedures pragmatically in ways which guarantee Sharia compliance today and in the long-term.

Independence:

We are a licensed Sharia advisory and Sharia audit firm by the Central Bank of Bahrain and also apply International Standards of Quality Control (ISQC 1). We are committed to maintaining our independency as per AAOIFI’s GSIFI No. 1 standard, giving you confidence in our decisions every time.

Dedication to international assurance:

Our heritage is independent Sharia compliance expertise. We are also committed (under the external Sharia compliance audit service) to delivering assurance built on International Standard on Assurance Engagements 3000 (ISAE-3000). In maintaining our independency, we leave no questions unanswered so as to draw accurate conclusions.

What can we audit remotely for you?

As one of the world’s leading Sharia audit firms, we’ve continue to audit thousands of transactions for a wide variety of products, from banking to insurance, asset management to fin-tech industry. Few examples include,

  • Real-estate business
  • Automotive financing
  • Private equity deals
  • Corporate banking services
  • Investment banking products
  • Insurance services
  • Real Estate Income Trust (REIT)
  • Peer to peer lending
  • Leasing projects
  • Retail banking products
  • Payment solutions

Our Capabilities

We offer an expertise-led Sharia audit model to deliver differentiated values that truly supports our clients. Examples include:

Multiple Industries Insights:

Serving multiples industries from banking to insurance, asset management, agri-business, fintech, our remote audit can provide you objective insights that your business need to sustain Sharia compliance – including transaction reviews, private equity screening, research, learning and development and Sharia standards management. Recommendations are based on proven benchmarks and proindustry practices of Sharia compliance.

Sharia Non-Compliance Risk-Based Scoping:

Even though the audit is done remotely yet our approach to Sharia audit scoping maps the non-compliance risk factors with Sharia audit ratings, cyclical Sharia Board reviews, internal Sharia control workflow and regulatory directives on Sharia governance. Our Sharia non-compliance risk-based scoping can also be adapted to your institutions specific methodology.

Listed Equities Assessment:

As part of our audit capabilities we conduct Sharia screening on listed equities that unites the ease of software with the muscle of data and industry equity practices. The global equity screening is jointly conducted with our partners Ideal Ratings and provide you an instant view of the equity from multiple rulebooks, such as AAOIFI, MSCI, and your Sharia Board. For you, this means clearer, faster Sharia compliance results and decision making for trading priorities.

Worldwide Scholarly  Network:

We’ve more than 31 scholarly resources from +16 countries. This helps draws on the strength and scale of advisory network to assist clients in getting deeper insights during the audit of their products, funds and transactions assessing them in light of different schools of Islamic jurisprudence. Initially launched in Saudi Arabia in 2004, our scholar network has expanded to the UK, Malaysia, Pakistan, the Middle East, and Africa.

Quality Control:

We apply International Standard on Quality Control 1 (ISQC1) to maintain a system of quality control on our external Sharia audits. ISQC 1 is an internationally recognized quality control transformation approach founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

Sharia Assurance (ISAE 3000)

Sharia Assurance (ISAE 3000)

Our Sharia assurance practice is conducted in light of the most widely recognized international standard, ISAE 3000. Under this service, the scope of work is sized to your specific Sharia governance, controls and investment needs and the level of assurance designed accordingly.

Our assurance not only helps to strengthen your credibility with regulators and external audiences, but also provides confidence internally by assuring your executives, and board of directors that processes and controls are in conformance to the laid down Sharia directives.

Elevate stakeholder confidence with ISAE 3000

As external Sharia assurance becomes integrated with wider corporate reporting, organizations are seeking Sharia governance, products and controls assurance to support reliability of their reported performance. In some countries like Bahrain, Oman and Pakistan external Sharia assurance has already become mandatory on Islamic banking licensees operating in the country. But unlike financial accounting, the measurement and collection of Sharia compliance controls and reporting continues to evolve, so normal processes, checks and measures may not be in place. It is here our service, in light of ISAE 3000 report, provides assurance that the processes and controls included in your reporting are actually in place and operating effectively at your institution. Apart from greater credibility, key benefits of Sharia assurance with ISAE 3000 reporting includes:

  • Attestation that information provided in your Sharia compliance reporting is reliable and presents a fair picture
  • A trusted report with relevant and focused information on Sharia governance, products and controls to communicate internally and externally
  • Confidence in actions taken by management to reduce exposure to Sharia non-compliance
  • Feedback on effectiveness of controls and processes
  • Guidance on quality of internal Sharia audit and product implementation reporting.

How we can support you

With the changing landscape of regulatory requirements both internal and external stakeholders are demanding trust and transparency in Sharia compliance controls and reporting. Towards this end, we conduct an independent external Sharia audit of your current Sharia compliance reporting structure, assessing how effective it is and how it measures up to criteria laid down by Sharia directives. Additionally, our service will be in accord to ISAE 3000 which is an international attestation practice which allows you to receive a report based upon a recognized, international standard. Examples for illustration are provided below.

Example 1

An Islamic bank provides a suite of Sharia compliant products and investments. The central bank  requires the Islamic bank to report on the effective operation of Sharia governance and operations. The control report provided by the Islamic bank will be audited by us in accordance with the ISAE 3000 standard. After completing an in-depth assessment (and subject to satisfactory audit completion) we issue an assurance report which reflects the existence and effectiveness of Sharia governance.

Example 2

A large financial institution reports on Sharia compliance to their Central Sharia Supervisory Board (CSSB). The criteria for reporting is provided by CSSB. As your external Sharia auditor we will provide Sharia assurance on the reporting; considering the criteria provided by CSSB. This Sharia Assurance will be provided in accordance with the ISAE 3000 standard. The CSSB and other users of our Sharia Assurance report will receive attestation that information being provided is accurate and is based on international assurance practice. They also know that the information provided is in compliance with the relevant Sharia criteria.

What are the requirements for ISAE 3000?

The ISAE 3000 requirements are included on the IFAC website which can be downloaded here. The standard includes the following components: Ethical Requirements (under the IESBA code), Quality Control procedures (ISQC 1 requirements), Planning and Audit procedures, Reporting requirements, and Professional Skepticism. The five key components of the assurance engagement under this standard are:

  • A three-party relationship involving: the external Sharia auditor, a responsible party and intended users.
  • Appropriate subject matter.
  • Suitable criteria.
  • Sufficient, appropriate evidence to support the conclusion.
  • A conclusion contained within a written report.

Why would ISAE 3000 Sharia Assurance report benefit you?

Our ISAE 3000 guided Sharia audit report allows you to demonstrate and foster a strong Sharia control environment. This report can be used by your management and SSB to assess the overall health of your internal Sharia control environment. Also depending on the type of Sharia assurance report, the public can gain assurance over key areas such as management of Sharia non-compliance affairs, effectives in controls, existence of governance, availability of systems, integrity of internal Sharia reporting arrangements, independency and processes.

What’s the difference between Sharia Assurance under ISAE 3000 and SSB certification?

  • The completion of ISAE 3000-Sharia Assurance is accompanied with a formal attestation, and not just a certificate of Sharia compliance
  • SSB certification reflects a point in time, but an ISAE 3000-Sharia Assurance can cover a period, therefore providing a greater level of Sharia compliance assurance
  • SSB certification only focuses on the product contracts and to an extent the respective policies while ISAE 3000-Sharia Assurance is more flexible. Extended principles, controls and systems can be scoped in as desired – covering the principles that are relevant to you and your stakeholders

Your benefits under can also include:

  • Reputation and Commercial edge – a method to differentiate your Islamic financial institution or product from its competitors.
  • International assurance – provides reasonable assurance on Sharia governance and controls to a broad range of clients with a single international reporting standard under ISAE 3000.
  • Regulatory requirements – demonstrates to regulatory bodies that Sharia controls are in place and operating effectively.
  • Improve controls – generates awareness on the importance of Sharia controls and embeds a strong control culture within the organization.

IPO Certificate of Sharia Compliance

Sharia Evaluation and Qualification Report

Our Sharia evaluation approach is designed to assess and support your business and financial structure. Important issues such as business model, transactional contracts, debt capacity,  financial instruments, funding options, loans and deposits status will be proactively surfaced, discussed in light of Sharia principles and addressed promptly and consistently.

We have an incredible experience in serving companies as Sharia Advisor through their IPO journey, as evidenced by our leading IPO market share in the Kingdom of Saudi Arabia – where we have advised and supported companies from different industries. As part of our Sharia evaluation we will also help your IPO transaction become aware of any “non-compliance listing” beforehand and advise on potential solutions to attain Sharia compliance.

Why Engage Us?

Our experience in managing companies going public ensures that we understand what has to happen during the IPO’s Sharia evaluation and qualification process.  Additionally, our team specializing in IPO’s Sharia qualification is multi-disciplinary, covering Sharia review, structuring, finance, Sharia audit, transactional certification. This enables us to advise your business with multiple options and develop an appropriate roadmap to help your IPO achieve Sharia compliance. We also have,

  1. A proven track record for helping client list their equities and deliver value with Sharia compliance.
  2. Deeper insights on sensitive issues by connecting with a wide-network of +34 scholars from 19 countries and help navigate matters that may require Sharia consultation.
  3. Strong working relationship with lead investors in the Kingdom and their Sharia criterion for investment.
  4. International practice using AAOIFI Sharia standards as part of evaluation and reporting.
  5. Extensive Sharia advisory capabilities and experience in working with management and other IPO advisors to achieve economic advantage in time, whilst delivering Sharia certification at a competitive price.

Why Our IPO Certification Service Is The Best Choice for You?

We  work to gain an understanding of your company’s business, contractual make-up, financial information, commercial processes and policies for the purpose of evaluation in light of Sharia principles. Utilizing the institutional knowledge gained during the IPO transaction review, we assist you in securing the appropriate Sharia contractual provisioning and in establishing a solid financial structure that meets prevalent Sharia criterion. Our services will also include,

  1. A structured evaluation of the business process in light of Sharia standards;
  2. Ensure timely identification and communication of key issues non-congruent with Sharia principles;
  3. Identify and highlight, spanning all elements of business, divestment requirements with a particular focus on non-permissible investment and income;
  4. Issue the Sharia report with in your IPO transaction timetable in line with your listing arrangements;
  5. Offer ongoing market support post-IPO to ensure your equity remains compliant as time progresses. This support is offered at both the investor and index provider level ensuring the very best outcome for your financial decision-making process.

Our Market Position:

We have been advising and supporting number of companies going public in the Kingdom of Saudi Arabia. Not only have we evaluated and certified more companies going through the listing process than any other Sharia advisory firm, but we continue to support selected companies post-IPO in maintaining their equity processes and Sharia financial control to this day. This gives us tremendous experience in guiding IPO’s in their listing journey in a Sharia compliant manner.

Sharia Supervisory Board

The challenging regulatory environment of Sharia compliant financing, increasing Islamic product complexities and customer demand for faster certification of documents is forcing the Islamic financial industry to rethink the way Sharia Supervisory Boards (SSB) are managed.

To cope with this constantly evolving regulations and existing needs of setting up SSB’s and the ensuing review and certification of transactions, we have developed our services as of solution for your company. We will help you meet all requirements for Sharia scholars assignment, administration and regulation and will also work with you to satisfy governance and Sharia controls, working within your existing business make-up.

Why our SSB service is the best choice for you 

We are committed to delivering an SSB service that adds value – our independent partner-led service gives you much more than just your annual meetings with the scholars. Our service identifies the right scholars for your needs and assembles them to setup the Sharia Supervisory Board (SSB) for your Company. We then assign a dedicated Sharia Manager as a focal point for you to liaise with and to help support you in implementation of the SSB’s guidance and rulings. Over the years we have designed many techniques to develop procedures that are tailored to the needs of each of your requirements, spanning from quick SSB investment solutions to product approval delivery in a matter of days, to large project structuring.

What type of regulatory Support do we offer? 

To help you tackle central regulatory challenges and comply with their Sharia governing directives we offer a one stop solution that delivers the compliance and peace of mind you need at a cost you can afford. The core of our solution is an in-house team that can be seamlessly integrated into the value chain of your organizations regulatory mandate. Additionally, we’ll support your regulatory goals with:

  • Filing the Governance Structures along with appointment, remuneration and dismissal procedures;
  • Drafting of Internal Control procedures between the SSB and key business activity;
  • Coverage of SSB Conflict Management Policy, Principles and Implementation;
  • Documenting the oversight process of application of Product rulings and Guidelines;
  • Submitting the system of management and containment of Sharia breaches;
  • Designing the SSB’s review as per GSIFI No. 2 of the AAOIFI Governance standards.
External Sharia Audit

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 Sharia 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 Methodology

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 Compliance2016 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.