1. Dr. Hussein shehata Prof. of accounting Al- Azhar University Cairo Compiled By

2. In The Name Of ALLAH The Most Beneficent The Most Merciful Allah said in the holly Quran : " Allah has been a Watcher over you " ( Wemen:1 ) " إن الله كان عليكم رقيبا " ( سورة النساء : 1 )

3. Prophet Mohammed ( PBUH. ) says : when He has been asked about IHSAN : " …….then tell me about IHSAN : He said : it is to worship Allah as though you are seeing Him, and while you see Him not you truly, He sees you … " ( Related By Muslim ). سئل رسول الله صلى الله عليه وسلم عن الإحسان, فقال : " أن تعبد الله كأنك تراه, فإن لم تكن تراه فإنه يراك............." ( رواه مسلم عن إبن عمر رضى الله عنه )

4. CONTENTS Preface Meaning of Auditing in Islamic Methodology. - Objectives of Auditing in Islamic Methodology. Auditing in Islamic Methodology

5. - Features of Auditing in Islamic Methodology... - Principles of Auditing in Islamic Methodology. - Standards of Auditing in Islamic Methodology. - Reports of Auditing in Islamic Methodology.

6. PREFACE Moslems – certainly believe that, Islam is a way of life, it is a believe, jurisprudence, a state, strength, a sward, etc. It is a whole system.

7. They also believe that Islamic jurisprudence is universal for all mankind, perfect and comprehensive for all things and affairs, permanent for all times and indivisible and inseparable. It should be applied as a whole system. Allah says: “We have neglected nothing in the book” (Al-Anaam- 38).  مَّا فَرَّطْنَا فِي الكِتَابِ مِن شَيْءٍ ثُمَّ إِلَى رَبِّهِمْ يُحْشَرُونَ  ( الأنعام : 38)

8. Islamic as a whole system, consists of a set of sub-systems which integrate and act together to achieve spiritual and secular satisfaction for mankind. The Islamic economic system is a sub- system.

9. This note-book is mainly concerned with Auditing in Islamic Methodology as a branch of the Islamic Accounting System (Accounting in Islamic Methodology). It is intended to through some-light upon its meaning, concepts, features, principles, principles',Reports and application.

10. The main purpose of this note-book is to provide the reader with a proper insight into auditing in Islamic methodology as a system, and how it is capable to apply in real life at all times and in all places. I have done my best to make the selected topics of this note-book very easy to follow and to understand, so as to be of great help for Accountants and Auditors.

11. We should always remember that, Allah is the most all knowing …. “Be glorified ! we have no knowledge except that which you has taught us”. Thanks and praise be to Allah.  سُبْحَانَكَ لاَ عِلْمَ لَنَا إِلاَّ مَا عَلَّمْتَنَا إِنَّكَ أَنْتَ العَلِيمُ الحَكِيمُ  ( البقرة : 32) Dr. Hussien Shehata Prof. of Accounting Al-Azhar University

12. MEANING OF AUDITING IN ISLAMIC METHODOLOGY Meaning of Auditing in Arabic Dictionaries The world Auditing in Islam has many meanings according to the situation where it is mentioned and used.

13. In Arabic dictionaries it refers to: watch and inspect and report the financial actions and transactions and provide guidance to a better performance. Also, it refers to accountability and responsibility by the man-self or by others.

14. Meaning of Auditing in the Holy Quran In the Holy Quran, the word Auditing refers to Watch by Allah or by Self or by Others.Allah has said :" Allah has been a Watcher over you " ( Wemen:1 ) ( " إن الله كان عليكم رقيبا " ( سورة النساء : 1

15. " Oh,…but man is a telling Witness against him self “ (qeyama- 14 ). " بل الإنسان على نفسه بصيرة......" ( سورة القيامة – 14 )

16. Meaning of Auditing in the Sunna: Prophet Mohammed ( PBUH. ) says : when He has been about IHSAN : " …….then tell me about IHSAN : He said : it is to worship Allah as though you are seeing Him, and while you see Him not you truly, He sees you… " ( Related By Muslim ). سئل رسول الله صلى الله عليه وسلم عن الإحسان, فقال : " أن تعبد الله كأنك تراه, فإن لم تكن تراه فإنه يراك............."

17. General Meaning of Auditing in Islam It is concluded from the previous concepts that the general meaning of Auditing in Islam is to watch and inspect the operations of reviewing, controlling and reporting about transactions and dealings for correcting to the Due according to rules and Islamic jurisprudence to provide useful, right, timely trust and fair reports for decision-making.

18. The Main Objectives of Auditing in Islamic Methodology Are: (1)Protecting funds intact, and declaring the ownership what has been done. Without auditing (watching ) transactions, we can not correct the mistakes and errors OBJECTIVES OF AUDITING IN ISLAMIC METHODOLOGY

19. (2 ) Ascertaining justice, and more convenient to prevent doubts. (3) Helping in judgment between dealers. The judge man depends mainly on which is written down in records and has been watched by the Auditors.

20. (4 ) Helping in ascertaining the results of business during a certain period of time,( profit or loss) through out the Auditor Reports and witness,.

21. (5 ) Counting up Auditing the amount of zakah due at its time, and its distribution, between whom due. (6) Providing the ownership and partners in Islamic companies with Sharia Reports and Witness according to Islamic jurisprudence articles and rules.

22. FEATURES OF AUDITING IN ISLAMIC METHODOLOGY Auditing in Islam has some features which, Amongst these features are the following: (1 ) It is based on the Believe such as the believe that Allah is only owner of all things, the believe in the day after for accountability in front of Allah.

23. (2 ) It is based on Morals: such as: Allah fearing, honesty, trust, keep-promises, co-operation, forgiveness. In this context, Allah says: “Allah commands justice, the doing good and giving to kinsfolk and he forbids all shameful deeds and injustice and receive admonition ” (AL-Nahl - 90).  إِنَّ اللَّهَ يَأْمُرُ بِالْعَدْلِ وَالإِحْسَانِ وَإِيتَاءِ ذِي القُرْبَى وَيَنْهَى عَنِ الفَحْشَاءِ, ( النحل : 90) “ وَالْمُنكَرِ وَالْبَغْي 

24. (3 ) Auditing principles in Islam are conducted from the sources of Islamic jurisprudence such as the Holy Quran and sonna. These principles are perfect, permanent and comprehensive. (4 ) Auditing in Islam deals only with lawful transactions, and avoids evil and unlawful dealings.

25. (5 ) Auditing in Islam does tress on the behavioral aspects of the mankind working in the enterprise and motivates and incentives him towards straight path, according to Islamic jurisprudence. (6 ) Auditing framework in Islam is wider, it implies spiritual and secular aspects, it is applicable to the whole life.

26. Auditing in Islam is clarified into two concepts. They are: Self-Control and Control by Others. The following is a brief insight on each one. CLASSIFICATION OF AUDITING IN ISLAMIC METHODOLOGY CLASSIFICATION OF AUDITING IN ISLAMIC METHODOLOGY

27. Self-Watching It means that every Body control him self about what he done before the here after, it is called Self –controllability.

28. Watching by others It means that some body controls others and presenting reports about his affairs and behavior.

29. Kinds of Auditing Systems in Islamic Economic and Business There are many Kinds of Auditing in Islamic business and corporations. Amongst the m the following..

30. - Self-control. -Social watching. -Sharia control. - Governmental control -Internal Auditing. -External Auditing

31. Definition of Auditing Principle in Islam: Auditing in Islam as a science is based on a set of principles which govern the Auditor in his job. These principles are deduced from the sources of Islamic jurisprudence and from Traditions as far they do not oppose the rules of the Islamic jurisprudence. Some of these principle may be similar to those applied in the contemporary Auditing, but they has evidences from the Islamic juridical literatures. PRINCIPLES OF AUDITING IN ISLAMIC METHODOLOGY

32. Principles of Auditing in Islamic Methodology The main principles of Auditing in the Islam as methodology are:.

33. ( 1) – Integrity. (8) - Disc lure, (2) – Objectivity, (9) - Giddiness, (3) – Confidentiality, (10)- Orienting, (4) - Neutrality, (11)-Planning, ( 5) - Competency, (12)-legality, ( 6) - Continuity, (13)-Commit to Ethics (7) - Midlines, (14)- Commit to Religious

34. The standard in Islam is a measurement or a guide or a model to be followed in affairs, dealings and behavior. The standard should be Middle, Fair, Attainable, easy to reach, Clear an Contemporary. AUDITING STANDARS IN ISLAMIC METHODOLOGY

35. The Auditing standard in Islam can be divided into the following groups : -Believable standards. -Moral standards. -Behavioral standards. - Educational standards. -Practical standards.

36. The Amongst the practical Auditing Standards are : - Integrity 1- الاستقلالية -objectivity 2- الموضوعية -Confidentiality 3- الثقة

37. - competency 4- الشمولية Continuity 5- الاستمراريه -midlines' 6- الوسطيه Disc lure 7- الوضوح

38. The Auditing Report in Islam is a witness about affairs and Behavior during a certain time. Auditing Reports in Islamic Methodology

39. It declares the main remarks and commitments which should be Corrected to develop performance to the Best.

40. The main elements of the Auditing Report are : - The Title. - To whom is the Report is be concerned. - The period of the Report.

41. - The scope of the Report. - The Auditing standards be committed. - The Shania Rules be committed.

42. - The main Remarks and Errors - The main Recommendations - The Date of the Report. - The signature of the Auditor.

43. The END Praise Be to Allah