External Shariah audit
An independent audit of Shariah governance and compliance by persons outside the institution, appointed by the board.
An external Shariah audit is an independent review of an institution's operations and Shariah governance carried out by persons outside it. Bank Negara Malaysia's Shariah governance policy document allows the board to appoint any persons to conduct an independent external Shariah audit to provide objective assurance on the effectiveness of Shariah governance, alongside the internal Shariah audit that forms part of the internal audit function. The IFSB's corporate governance principles also refer to internal and external Shariah audit. Its value depends on the auditor's independence and access to complete records.
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This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.