Accounting and Auditing in Islamic Banking and Finance module (BU51023)

The module provides students with an advanced understanding of the accounting and reporting framework, standards, and practices of Islamic Financial Institutions (IFI). You will discuss and practise the various accounting Islamic financing, accounting and auditing activities.

The module discusses the developments in International Financial Reporting Standards (IFRS), the accounting treatments and disclosures of various Islamic financing activities (e.g. Mudarabah, Musharakah, Murabahah, and Ijarah), and their implications for IFI.

What you will learn

In this module, you will:

• gain a comprehensive understanding of accounting for Islamic financial services
• apply analytical skills related to accounting aspect of Islamic banking and insurance (Takaful)
• assess the financial reporting and performance of Islamic financial institutions
• critically review the core concepts, principles and objective of accounting, and accounting regulatory standards for Islamic banking and insurance
• develop abilities to apply Islamic accounting principles and related accounting regulatory framework into the context of business and social transactions in Islamic financial services

By the end of this module, you will be able to:

• critically understand and evaluate the differences between Islamic and conventional core concepts, principles and objective of accounting, and accounting regulatory standards differences for banking and insurance
• demonstrate how to apply and evaluate accounting standards for sales-based transactions (Murabahah, Salam, Istisna), investment-based transactions (Mudharabah, Musyarakah), Islamic deposit and investment account, treasury transactions, lease-based transactions (Ijarah), socio-objective transactions (Gardh Hassan, Zakah), takaful transactions
• critically understand Sharia review and Sharia audit in Islamic financial institutions

Assignments / assessment

• Essay 1 (50%)
• Essay 2 (50%)

This module does not have a final exam.

Teaching methods / timetable

You should expect weekly lectures of two hours and to have completed the reading and tasks in preparation of contributing to the class. This is included in the 180 hours of guided independent study including the completion of both essays.

There are 10 weeks of teaching. For this module, the exact dates of teaching and/or reading weeks are to be confirmed.