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  • SG-4.2 SG-4.2 Roles and Responsibilities of the Head of Internal Shari'a Audit Function

    • SG-4.2.1

      The head of internal Shari'a audit function must review and examine the adequacy and effectiveness of the Bahraini Islamic bank licensee's Shari'a compliance system. This must cover all aspects of the Bahraini Islamic bank licensee's business operations and activities in order to assess the extent of Shari'a compliance requirements as stated under Paragraph SG-4.1.4.

      August 2017

    • SG-4.2.2

      The head of internal Shari'a audit function must have direct and regular communications with all levels of management, SSB, Audit Committee, Shari'a Officer and IESCA. No scope limitation and/or restriction of access to documents, reports, etc. must be placed on internal Shari'a audit staff.

      August 2017

    • SG-4.2.3

      Internal Shari'a audit staff must be objective and maintain independent attitude in performing their internal Shari'a audit. They must reach objective conclusions based on work performed and the results thereof.

      August 2017

    • Internal Shari'a Audit Report

      • SG-4.2.4

        The head of internal Shari'a audit function must prepare periodic reports to the SSB, based on the audit plan, for consideration and appropriate action. A copy of such reports must also be presented to the Audit Committee and the CEO.

        August 2017

      • SG-4.2.5

        For purposes of Paragraph SG-4.2.4, the report presented by the head of internal Shari'a audit function to the Audit Committee should also include a summary of the SSB's response to the points highlighted in the report.

        August 2017

      • SG-4.2.6

        The head of internal Shari'a audit function must follow up to ascertain that appropriate action is taken on his reported findings and recommended corrective actions. In addition, any other recommendations relating to Shari'a matters made by the SSB, the IESCAs and the CBB must be followed up.

        August 2017

      • SG-4.2.7

        Any difference of opinion between the management and the head of internal Shari'a audit function on matters relating to Shari'a interpretation must be referred to and decided by the SSB.

        August 2017

    • Shari'a Audit Plan

      • SG-4.2.8

        The head of internal Shari'a audit function must have an internal hari'a audit plan in place which must be approved by the SSB on an annual basis.

        August 2017

      • SG-4.2.9

        For purposes of Paragraph SG-4.2.8, the internal Shari'a audit planning process must include, but not be limited to, the following:

        (a) Developing an internal Shari'a audit program;
        (b) Obtaining background information about the activities to be audited, such as locations, products/services, branches, divisions, etc.;
        (c) Establishing internal Shari'a audit objectives and scope of work;
        (d) Obtaining SSB fatawa, guidelines, instructions, prior year internal and independent external Shari'a compliance audit results, relevant correspondence including with the CBB;
        (e) Determining the resources necessary to perform internal Shari'a audit;
        (f) Communicating with all the individuals at the Bahraini Islamic bank licensee who need to know about internal Shari'a audit;
        (g) Performing, as appropriate, a survey to become familiar with activities, risks and controls to identify areas of internal Shari'a audit emphasis, and to invite comments and suggestions; and
        (h) Establishing a risk-based Shari'a audit plan.
        August 2017