In accordance to Article No. (10.6) of the Shari’ah Governance Standard, the internal Shari’ah control division or section shall perform various functions, including Shari’ah Compliance Function (“SCF”). The SCF is responsible to continuously monitor compliance of an IFI’s businesses and activities with resolutions, fatwas, regulations, and standards, which are issued by the HSA.
4.2
The SCF is different from Shari’ah audit in terms of reporting line, frequency of the review, as well as the fact that SCF conducts reviews before and during the execution, while Shari’ah audit conducts review post execution.
4.3
The responsibility regarding managing Shari’ah Non-Compliance Risk lies with the IFI’s risk management department, not with the SCF. However, the two departments should provide each other with information in order to achieve compliance with Islamic Shari’ah and manage Shari’ah Non-Compliance Risk in a prudent manner.