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Current Issues in Auditing - Coggle Diagram
Current Issues in Auditing
Transnational Audit
Definition
an audit of financial statements which are or may be relied upon outside the audited entity's home jurisdiction
for purposes of significant
lending, investment or regulatory decisions
include audits of all financial statements of companies with listed equity or debt and other public interest entities
Shariah Audit
Definition
periodic assessment conducted from time to time, to provide an independent assessment and objective assurance designed to add value
improve the degree of compliance in relation to the business operations of Islamic Financial Institutions (IFI’s) business operations, with the main objective of ensuring a sound and effective internal control system for Shariah compliance.
Levels
1) Audit of IFIs financial
statements
2) Compliance audit of
organizational structure, people and processes
3) Review the adequacy of the Shariah governance process, providing recommendations (Audit Committee & Shariah Committee)
Importance
detect non-compliance
assess the degree of non-
compliance and its effect
recommend corrective actions, improvement and rectifications necessary by the identified persons in-charged
Why Shariah-Compliant
having the Islamic financial
system
distinguishes Islamic financial
system from conventional financial system
Ensures acceptance, validity
and enforceability of contracts from Shariah point of view
Money Laundering
Definition
process by which the proceeds of crime are converted into assets which appear to have a legal rather than an illegal source
The aim of disguising the source of the property is to allow the holder to enjoy it free from suspicion as to its source.
Legislation
Anti-Money Laundering, Anti- Terrorism Financing and Proceeds of Unlawful Activities Act 2001
require such professionals to report money laundering to the authorities and to have systems in place to train staff and keep records
Stages
Placement
Initial disposal of the proceeds of criminal activity into an apparently legitimate business activity or property
Layering
the transfer of money from business to business, or place to place, in order to conceal its initial source
Integration
the culmination of the previous procedures through which the money takes on the appearance of coming from a legitimate source
Offence
Any person who-
engages, directly or indirectly
acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, dispose
removes from or brings into
Malaysia, proceeds of an unlawful activity
conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition