Role of the auditor in an islamic economy

Abstract EN

Auditing in an Islamic framework would have wider scope than traditional auditing.

In contemporary practice, the auditor is directly liable only to his clients, i.e.

owners of the business being audited.

He is not guided by religious principles; the quality of the managerial decisions, too, are not his concern.

In the light of Islamic teachings and practice in early Islamic society, the auditor should be liable also to financiers, should assess management practices, and report on its compliance with Shari'ah, (e.g.

fulfillment of contracts, honesty, avoidance of monopoly and extravagance).

Hence, auditors must have good knowledge of Islamic law.

An Islamic Audit Foundation is proposed to evolve standards, train personnel and conduct auditing.