Islamic Bank and Financial Institutions Accounting ACNE 4323

Course description:

This course is designed to introduce students to basic issues in Islamic Accounting, accounting for Islamic deposits and investment accounts, accounting for Mudharabah investment account, Islamic equity financing and Islamic assets financing (Salam Sale and Ististana’, Musharakah, Murabaha and Ijara), LC funding operations,accounting for Zakat, andauditing of Islamic compliance andthe role of Sharia supervision of Islamic Financial Institutions (IFIs) as set bystandards of the accounting and auditing organization for Islamic financial institutions AAOIFI.

Course Aims:

The objectives of the course are to develop an understanding of:
  • The meaning of Islamic accounting and its differences with conventional accounting.
  • The applicability of GAAPs and accounting standards in IFIs.
  • Accounting for various types of deposits in Islamic banks.
  • Accounting for Islamic equity and assets financing(Salam Sale and Ististana’, Musharakah, Murabaha and Ijara), as well as LC funding operations in Islamic banks.
  • Accounting for Zakat in Islamic banks, and Auditing and Sharia Supervision of IFIs.

Course outcomes:

At the completion of the subject, students should be able to: 
  • Understand the fundamental differences between Islamic and conventional accounting, as well as the essence of Islamic accounting importances to IFIs.
  • Understanding the various types of transactions applied in Islamic banks and how to conduct proper accounting and reporting for such transaction under AAOIFI standards.
  • Understand the risk-sharing and profit-sharing concepts in Islamic finances in contrast to the risk free debt financing for fixed interest rate in conventional banks.
  • Understand the concept and application of Zakat in Islamic banks as well as the role of Sharia Supervision boards in auditing sharia compliance in IFIs.