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ACC 305
Final Examination Paper
xx November 2014

Time allowed:

3 hour 00 minutes

Total Number of pages:

FIVE Pages including the cover sheet

General Instructions:
(Specific instructions by
subject Lecturer - )

1. This paper has TWO SECTIONS:
Section A: Answer THREE
questions from this section.
Section B: Answer ANY THREE
questions from this section.
2. Read the questions carefully before
3. Clearly write the question numbers and
number of sub-parts of the questions
4. Your hand writing should be clear and
5. This paper carries 100 Marks.


(10 marks) 3. But what you give in zakah.Final examination-(ACC 305) 2014 SECTION A – 40 marks Answer three questions. Examine the two (2) contracts. (12 marks) 2. Discuss these issues. The Shari’ah disallows riba and there is now a general consensus among Muslim economists that riba is not restricted to usury but encompasses interest as well. desiring the countenance of Allah . (8 marks) b) What are the misconceptions about the present day interest? Provide arguments to justify the misconceptions being tantamount to Riba. question 1 is compulsory 1. two contracts are exempted from this rule. As revealed in Surah Ar-Rum verse 39. However. (Sahih International) a) Explain the difference between (i) riba al-nasiah and (ii) riba al-fadl. Shari’ah requires the subject matter to be in existence at the time of sale.those are the multipliers. And whatever you give for interest to increase within the wealth of people will not increase with Allah. However. (10 marks) Page 2 of 5 . The Quran forbids the charging of riba on money lent. a Shari’ah-based formal model for a stock market is yet to be formulated due to some major structural issues. The Islamic economic system relies upon vibrant markets for equity-based securities.

That is more just in the sight of Allah and stronger as evidence and more likely to prevent doubt between you. Let no scribe be harmed or any witness. And Allah is Knowing of all things. Let no scribe refuse to write as Allah has taught him. a) Identify and explain two (2) contracts an Islamic Bank may use for their current and saving account. “O you who have believed. And do not be [too] weary to write it. then a man and two women from those whom you accept as witnesses . it is [grave] disobedience in you. Same as conventional banks. his Lord. The need for accounting records as means for trust building is emphasized in the Quran. when you contract a debt for a specified term. write it down.” (2:282). And Allah teaches you. So let him write and let the one who has the obligation dictate. And if there are not two men [available]. For [then] there is no blame upon you if you do not write it. indeed. then the other can remind her. For if you do so. And let a scribe write [it] between you in justice. And let him fear Allah. But if the one who has the obligation is of limited understanding or weak or unable to dictate himself. (10 marks) Page 3 of 5 . for its [specified] term. whether it is small or large.Final examination-(ACC 305) 2014 4. but different in principles – No interest and No pre-determined return. (10 marks) b) Identify and explain two (2) contracts an Islamic Bank may use for financing their funds. and not leave anything out of it. And let not the witnesses refuse when they are called upon. And bring to witness two witnesses from among your men. an Islamic Bank also accepts deposits from the public and utilises the same by lending it to those who seek financing for various that if one of the women errs. then let his guardian dictate in justice. except when it is an immediate transaction which you conduct among yourselves. What are the broad objectives of Financial Accounting and Reporting for Islamic Financial Institutions? (10 marks) SECTION B – 60 marks Answer any 3 questions 1. And fear Allah. And take witnesses when you conclude a contract.

Currently there are various takaful business models that are being used in the various jurisdictions throughout the world. He also informs you that his cost of funding the generators should not exceed 10% of the cost.Final examination-(ACC 305) 2014 2. The MD. You are required to explain the structure of Sukuk as well. What factors impede the growth of Sukuk markets? (5 marks) 3. Explain the modus operandi of a pure Mudharaba model for providing takaful services. namely: The Mudharaba Model The Wakalah Model The Hybrid Model The Waqf Model a. feels that the rates charged by the banks are exorbitant and exploitative based on the situation of Fenaka. Ministry of Finance informed Fenaka of its unwillingness to provide any financing due to its commitment to civil service commission every year. Fenaka Corporation requires 80 generators (40Kws) to be installed at different parts of the Maldives to provide uninterrupted power to the population of Maldives. From your knowledge. The MD has asked you to structure a Sukuk that would result in acquiring the generators. (15 Marks) b. What are the key differences between conventional insurance and takaful? (5 Marks) Page 4 of 5 . structure a Sukuk that would best cater to the situation of Fenaka Corporation. a. the banks are ready to lend to Fenaka Corporation at a 25% interest rate. Banks are also unwilling to lend as Fenaka lacks in suitable assets as collateral. (15 marks) b. however. It is estimated that the generators would cost around 10 million United States Dollars. The MD of Fenaka was informed that Islamic finance could be able to give a solution to the matter by issuing a Sukuk. However.

a. but has been permitted by mainstream scholars under certain conditions. (12 marks) b. Tawwaruq is deemed as a controversial debt based financing instrument in Islamic finance. Explain the concept of Tawwaruq practiced by contemporary Islamic banks.Final examination-(ACC 305) 2014 4. or legal tricks. What are the general rules for legitimising Tawwaruq as proposed by Scholars? (8 marks) END of Paper Page 5 of 5 . Tawwaruq is a financing product that is cited as a classic case of hiyal.