---
title: "What is External Shariah audit? | IslamicOpenFinance™"
description: "An independent audit of Shariah governance and compliance by persons outside the institution, appointed by the board."
url: https://islamicopenfinance.com/glossary/external-shariah-audit/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Shariah governance](https://islamicopenfinance.com/glossary/#governance)

Shariah governance

# 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.

## Sources

- [Bank Negara Malaysia, Policy Document on Shariah Governance, 2019: Shariah audit, independent external Shariah audit](https://www.bnm.gov.my/documents/20124/761679/Shariah+Governance+Policy+Document+2019.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Shariah audit** An independent assessment of internal controls, risk management and overall Shariah compliance, usually by internal audit.](https://islamicopenfinance.com/glossary/shariah-audit/) [**Shariah review** A regular compliance function that assesses whether an institution's operations follow Shariah requirements.](https://islamicopenfinance.com/glossary/shariah-review/) [**Shariah governance system** The institutional arrangements through which an institution ensures independent oversight of its Shariah compliance.](https://islamicopenfinance.com/glossary/shariah-governance-system/) [**Shariah supervisory board** An independent panel of Shariah scholars that approves an institution's products and oversees its Shariah compliance.](https://islamicopenfinance.com/glossary/shariah-board/)

**Shariah governance**

1. [Shariah supervisory board](https://islamicopenfinance.com/glossary/shariah-board/)
2. [Fatwa](https://islamicopenfinance.com/glossary/fatwa/)
3. [Shariah governance system](https://islamicopenfinance.com/glossary/shariah-governance-system/)
4. [Shariah review](https://islamicopenfinance.com/glossary/shariah-review/)
5. [Shariah audit](https://islamicopenfinance.com/glossary/shariah-audit/)
6. [Shariah non-compliance risk](https://islamicopenfinance.com/glossary/shariah-non-compliance-risk/)
7. [Purification of income](https://islamicopenfinance.com/glossary/purification/)
8. [Central Shariah board](https://islamicopenfinance.com/glossary/central-shariah-board/)

[All 221 terms](https://islamicopenfinance.com/glossary/)