Podcast
Questions and Answers
What is the primary objective of an audit of financial statements according to the auditing standards for Islamic financial institutions?
What is the primary objective of an audit of financial statements according to the auditing standards for Islamic financial institutions?
Which of the following is NOT considered an ethical principle governing an auditor's professional responsibilities?
Which of the following is NOT considered an ethical principle governing an auditor's professional responsibilities?
What phrase do auditors use to express their opinion on financial statements?
What phrase do auditors use to express their opinion on financial statements?
What does the auditor's opinion enhance regarding the financial statements?
What does the auditor's opinion enhance regarding the financial statements?
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Which organization issues the 'Code of Ethics for Professional Accountants' relevant to Islamic financial institutions?
Which organization issues the 'Code of Ethics for Professional Accountants' relevant to Islamic financial institutions?
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What does the term 'scope of an audit' refer to?
What does the term 'scope of an audit' refer to?
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What is meant by 'reasonable assurance' in an audit context?
What is meant by 'reasonable assurance' in an audit context?
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Which of the following is NOT a limitation inherent in an audit?
Which of the following is NOT a limitation inherent in an audit?
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What role do the Shari'a Rules and Principles play in an audit?
What role do the Shari'a Rules and Principles play in an audit?
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Which factor is considered when determining audit procedures according to ASIFIs?
Which factor is considered when determining audit procedures according to ASIFIs?
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Study Notes
Objective and Principles of Auditing
- This Auditing Standard for Islamic Financial Institutions (ASIFI) establishes standards for guiding financial statements audits at Islamic financial institutions.
- Audits must ensure financial statements comply with Sharia Rules, AAOIFI accounting standards, and relevant national accounting practices.
- The auditors should conduct an audit using the "Code of Ethics for Professional Accountants" issued by AAOIFI and the International Federation of Accountants, ensuring that these codes do not conflict with Islamic guidelines.
- The auditor must plan and perform the audit with professional competence and care.
- The auditor should satisfy themselves that the transactions examined comply with Shari'a Rules.
- The auditor must gather sufficient evidence and determine if there are any unusual circumstances that increase the risk of material misstatement beyond the norm.
- The scope of an audit includes procedures necessary to achieve the audit objective.
- The auditor should consider relevant Islamic Rules, ASIFIs, relevant professional bodies, legislation, regulations, the terms of the audit engagement, and reporting requirements when determining audit procedures.
- The responsibility for preparing and presenting the financial statements lies with the management of the financial institution.
- The audit does not relieve management of this responsibility.
- An audit aims to provide reasonable assurance, ensuring the financial statements as a whole are free from material misstatements.
- An audit aims to provide reasonable assurance that the transactions inspected comply with Shari'a Rules and Principles.
- An audit is designed to provide reasonable assurance that the financial statements taken as a whole are free from material misstatement, taking into account inherent limitations such as:
- Sampling
- Internal control systems
- Persuasive rather than conclusive evidence
Scope of an Audit
- The "scope of an audit" refers to the audit procedures necessary to achieve the objective of the audit.
Reasonable Assurance
- Reasonable assurance is a concept related to gathering audit evidence, enabling the auditor to conclude that no material misstatements exist in the financial statements.
Effective Date
- This standard is effective for financial statements for financial periods starting on or after 1 Muharram 1418 A.H./1 January 1998 A.D.
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Description
This quiz covers the key principles and objectives of auditing specifically tailored for Islamic financial institutions. It focuses on compliance with Sharia Rules and AAOIFI standards, as well as the ethical guidelines auditors must follow. Test your understanding of the auditing processes and requirements unique to this sector.
