SG-5.2 SG-5.2 Roles and Responsibilities of Independent External Shari'a Compliance Audit
SG-5.2.1
The IESCA must conduct an annual independent external Shari'a compliance audit, to be completed before the issuance of the annual SSB Report, and submit his independent assurance report on the management's report (See SG-5.3.1) to the Audit Committee and thereafter to the SSB and the management of the
Bahraini Islamic bank licensee (See Appendix SG-1 under Part B of the CBB Rulebook Volume 2).August 2017SG-5.2.2
IESCA must assess the existence of relevant controls and their effectiveness in implementation by the
Bahraini Islamic bank licensee's management of the policies, procedures and decisions of the SSB to achieve Shari'a compliance.August 2017SG-5.2.3
The independent external Shari'a compliance audit report must be guided by International Standards on Assurance Engagements 3000, Assurance other than Audits or Reviews of Historical Financial Information in order to ensure that
Bahraini Islamic bank licensee's activities are conducted in a Shari'a compliant manner in accordance with and following the below hierarchy:a. relevant CBB regulations, resolutions and directives;b. applicable AAOIFI standards;c. the rulings of the Centralised Shari'a Supervisory Board; andd. Shari'a guidelines / directives issued by its SSB.Amended: January 2019
August 2017SG-5.2.4
The IESCA should have no responsibility for assessing the competence of the members of the SSB other than whether they meet the fit & proper criteria specified by the CBB.
August 2017SG-5.2.5
The IESCA should satisfy himself that the
Bahraini Islamic bank licensee's process for introducing new products, transactions or services or modifying existing ones includes appropriate procedures for ensuring compliance with Shari'a rules and principles including reviews by theBahraini Islamic bank licensee's senior management , internal audit and SSB.August 2017SG-5.2.6
The IESCA must test on a sample basis the transaction level controls, product specific controls and other relevant controls. For detailed work requirement, see Appendix SG-1 under Part B of the CBB Rulebook Volume 2.
August 2017SG-5.2.7
The IESCA must review the findings of all internal Shari'a audits carried out by the
Bahraini Islamic bank licensee's internal Shari'a audit function.August 2017SG-5.2.8
For the independent external Shari'a compliance audit, the audit committee in consultation with the SSB must ensure as far as possible that the IESCA is capable of conducting, and does conduct, ex post Shari'a compliance reviews.
August 2017SG-5.2.9
IESCA must communicate its comments and concerns on the
Bahraini Islamic bank licensee's relevant controls and their effectiveness to the board of directors and Shari'a Supervisory Board.Added: January 2019
