Professional Documents
Culture Documents
CH 4
CH 4
Chapter 4
making
decision-making
making
decision-making
Accountability in Islam
• Khilafah (vicegenrency)
• Taklif (responsibility)
Standards (IFRS)
regulation
Standards (IFRS)
• Financial accounting
• Auditing
Financial Accounting
Auditing
• Determines the authenticity, validity and reliability of the
financial information recorded or disclosed during a financial
period
• Forms of auditing:
- Internal auditing where the business carries out auditing
- External auditing when the business engages an outside
company, usually an auditing firm, to conduct auditing
• Equity holders
• Holders of investment accounts
• Other deposits
• Current and saving account holders
• Others who transact business with the Islamic bank, who
are not equity or account holders
• Zakah agencies (if there is no legal obligation for payment)
• Regulatory agencies
(AAOIFI Statement of Financial Accounting (SFA) No. 1, para 26)
Learning Objective 4.4
Accounting
(SFA No. 1) requires information intended for external users:
Accounting
An Islamic Perspective of Accounting Concepts
Methods
Figure 4.3:
Flow of Financial Transactions
Learning Objective 4.6 Draft
the main financial statements
for Islamic finance products
Financial Statements in Islamic
Banks and Financial Institutions
• Balance sheets
• Income statements