| THE INTERNAL AUDIT
OF ISLAMIC FINANCE TRAINING COURSE DURATION 4 DAYS
Course Description
This course covers Islamic finance from both a technical and Sharia’a
perspective, reviewing the risks applying and the controls operating within
Islamic finance. Aimed at new and existing internal auditors within Sharia’a
compliant finance, trade, investment and insurance, this course considers
the nature of the risks that are specific to this industry and the internal
audit tests which are appropriate.
Learning Objective
- To equip candidates with a practical understanding of the risks and
controls inherent within Islamic finance
- To provide candidates with an understanding of the audit techniques
appropriate to address the risks within Islamic finance
- To develop a series of internal audit programmes to address the key
risks within both the Islamic finance and Takaful (Islamic Insurance)
industries.
Who Should Attend
Internal auditors seeking to address the risks within the Islamic
finance industry.
Methodologies
Classroom lectures and interactive practical workshops.
Course Content:
Day 1
Session 1:
- An Introduction to Risk Management within Islamic Finance
- The principles and concepts which underpin Islamic Finance;
- The nature of Islamic law and its application;
- The role and constitution of the Sharia'a Supervisory Board
- What are the current key risks within the finance industry?
- How are these different within a Islamic Finance environment?
- The key risks existing within Islamic Banking
- Audit planning within an Islamic environment
- Case Study: Develop an initial analysis of the key risks existing
within Islamic Finance
- Case Study: What are the key elements of the audit planning memorandum?
Session 2:
- An introduction to Risk Management in Islamic Banking
- The basis of Islamic banking and finance
- The main components of the Islamic banking industry and its operating
structures.
- The application of risk appetite within Islamic Finance
- The development of risk registers within Islamic Finance
Case Study: What are the key elements that should be included within
an Islamic risk register?
- Case Study: Develop an audit programme to audit risk appetite
Session 3: Islamic Law of Contracts
- Principles of Islamic business including the avoidance of riba and
gharar;
- The concept of Wa’d (promise);
- The different types of contract;
- The purchase and sale of currencies
- The use of commodities
- The nature of the control environment applying within the legal functions
of Islamic institutions
- Case Study: What are the key risks arising from the application of
Islamic law? How should these be controlled in practice?
- Case Study: Develop an audit programme to address Islamic Contracts
Day 2
Session 4:
- Financial Techniques Applied by Islamic Banks
- The risk and control of Islamic current accounts;
- The differences in risk and control within the major Islamic contract
types:
- Mudaraba,
- Musharaka,
- Murabaha,
- Ijara,
- Salam,
- Istisn'a;
- The risk and control of letters of credit and guarantees in Islamic
finance contracts.
- Case Study: What are the key risks arising from the application of
Islamic law? How should these be controlled in practice?
- Case Study: Develop an audit programme to address financial techniques
within Islamic Finance
Session 5:
- Basel and Islamic Finance
- The framework for Basel – does this provide additional challenges
to the Islamic firm
- Credit risk
- Market risk
- Operational risk
- Basic indicator approach
- Standardised approach
- Advanced measurement approach
- Liquidity risk
- Strategic risk
- Reputational risk
- Case Study: Develop audit programmes for Basel credit and market
risks
Day 3
Session 6:
- Islamic Asset and Fund Management
- The purpose of investment in Islam;
- Prohibited industries and the problems of Groups ;
- The issues relating to replicating conventional deposit structures
using Murabaha and Mudaraba;
- The Islamic stock selection process and the role of the Sharia'a
Supervisory Board.
- Case Study: What are the key controls that are required over the
Islamic asset business?
- How do these vary from traditional investment companies?
- Case Study: Develop an audit programme to address Islamic asset and
fund management
Session 7: Islamic Bond Market - Sukuk
- The nature of Sukuk compared with conventional bonds;
- The risks and controls over the issuance of Sukuk bonds;
- The different types of Sukuk;
- How Sukuk issues are rated.
- How to value Sukuk bonds
- Case Study: What are the key risks and controls operating within
the Islamic bond market? How should these be controlled in practice?
- Case Study: Develop an audit programme to address sukuk bonds
Day 4
Session 8: Islamic Insurance - Takaful
- The nature and structure of Takaful compared with conventional insurance;
- The limitations on products within Islamic insurance
- How to remunerate the insurance operator
- The risks and controls within Takaful firms
- Case Studies: What are the greatest risks within Takaful? How will
these be controlled in practice?
- Case Study: Develop an audit programme to address Takaful
Session 9: Risk Management Techniques within an Islamic Finance
environment
- Control and risk self assessment
- Key risk, performance indicators and risk appetite
- Loss databases
- Stress testing and scenario modelling
- Case Study: What are the key risks within Islamic Finance and the
indicators that should be applied?
- Case Study: Develop an audit programme to address stress testing
and scenario modelling
Session 10: Documenting Audit Findings
- Prioritising findings – Sharia’a and non-Sharia’a
- How to report risk management findings
- What is really important?
State of the art facilities
Delegates can study in our comfortable hi-tech learning environment in
London, near Liverpool Street Station.
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The
Internal Audit of Islamic Finance
Course Venue: London EC2
information@premiercs.co.uk
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