CIPA Program AAOIFI Background 3 Introduction, Vision, and Mission - - PowerPoint PPT Presentation

An Introduction to the CIPA Program

AAOIFI Background

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Introduction, Vision, and Mission

Introduction to AAOIFI

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), established in 1991 and based in the Kingdom of Bahrain, is the leading international not-for-profit organization primarily responsible for protecting and enhancing the integrity of the Islamic banking & finance industry through the development and issuance of standards in the areas of Shari’ah, Accounting, Auditing, Governance, and Ethics. Thus far, 100 standards have been issued in total while several key standards are being developed on ongoing basis. AAOIFI standards are adopted by central banks, regulatory authorities, and Islamic financial institutions in a number of countries, either on a mandatory basis or as basis of guidelines, across the world and which has, over the years, introduced a progressive degree of harmonisation of international Islamic finance practices. AAOIFI is supported by numbers of institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from over 45 countries. To guide IF’s markets operation and financial reporting

• n

Shari’ah principles and rules. To provide IF markets with standards and guidelines that can support the growth of the industry.

Mission Vision

Standardization and harmonization

• f

international Islamic finance practices and financial reporting in accordance to Shari’ah.

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AAOIFI Areas of Work

01 02 03 04

Certification of Compliance Conferences & Events

Two International Conferences are held on an annual basis since the last 15 years

Standards Development

Standards Development Five disciplines are covered: Shari’ah, Accounting, Auditing, Governance, & Ethics Two International Conferences are held on an annual basis since the last 15 years Certification

• f

Compliance Certifications of compliance to AAOIFI Standards

• ffered

mainly for Islamic Banking and Investment business software Two professional qualifications are offered: i) Certified Islamic Professional Accountant; and ii) Certified Shari’ah Advisor & Auditor Professional Development & Training Conferences & Events

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St Standar ndards ds Devel elopment

• pment Tec

echni nical cal Boards ds & No. of St Standar ndards ds Issue sued d til ill l Dat ate e (J (Jul uly 2018) 18)

33 + 6

Standards Issued

8 + 2

Standards Issued

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Standards Issued

Accounting (and Auditing) Board Governance & Ethics Board Shari’ah Board

A technical board responsible for issuing, reviewing and updating the Shari’ah standards. The board has the absolute power in this respect as it represents the main reference and authority for the Islamic finance industry worldwide, whose standards are widely applied globally. A technical board responsible for issuing and reviewing the accounting standards and all related materials including guidelines, researches, interpretations, and other related scientific and professional products. A technical board which shall be responsible to carry out development and review of governance standards and codes of ethics, and all related materials including guidelines, researches and interpretations.

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in total

Professional Development

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AAOIFI’s Professional Qualifications Provides Expertise in AAOIFI Standards & Related Fields

Certified Islamic Professional Accountant (CIPA) Certified Shari’ah Advisor and Auditor (CSAA)

Accountancy Qualification Shari’ah Qualification

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Total No. of CIPA and CSAA Fellows

CIPA Fellows : 1000+ CSAA Fellows : 800+ Finding qualified human resources in the Islamic finance industry is regarded as one of the main challenges in this field. That is why AAOIFI, out of its belief in the fact that professional memberships play an important role in developing this industry, launched the first two professional certificates in the Islamic finance industry 20 years ago. Since the launching of these certificates in 2007 A.D., the number of Fellows have reached 1800 from over 50 countries, which has had a positive effect on their professional career to the extent that some of them have made their way among the most prominent figures of this field

1800+ Fellows from over 50 countries

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33 Exam Cen enter ers s in in 2 26 Countries untries Around und th the W e World rld

Bahrain UAE KSA Qatar Kuwait Lebanon Jordan Syria Turkey Pakistan Malaysia South Africa Mauritania Sudan Egypt Libya Tunisia Morocco Algeria UK Indonesia Sri Lanka Nigeria Iraq China Hong Kong

Why get the CIPA Qualification?

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Why Become a CIPA Fellow?

CIPA offers Powerful Learning Experience

• Based on AAOIFI standards which is a product of

cumulative knowledge and experience of a team of Shari’ah Scholars, professionals, consultants, and academicians, representing 20+ countries over a period

• f 25+ years
• Provides valuable experience in the field of accountancy

through the ‘Practical Experience Requirement’ (PER)

• Encourages multi-disciplinary learning by including, in

addition to accounting, the Shari’ah Audit, Law, Taxation, Risks, Capital Adequacy, and Governance topics

CIPA promotes Professional & Personal growth

• Highly specialized Islamic accountancy certification

as demanded by the employers in the global industry covering ~75 countries

• Backed

by AAOIFI – the leading international standard-setting body for the Islamic banking & finance industry

• Globally recognized by Regulators, Islamic Financial

Institutions, Professional Accounting Bodies, and Training Centers

Introduction to the CIPA Revamping Process

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CIPA Facts at a Glance

CIPA first launched in : 2006 CIPA Revamp Period : 2015 - 17 CIPA Fellows : 1000+ CIPA Exam Centers : 30 CIPA Countries Covered : 22

CIPA is a professional Islamic Accountancy certification program

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Comparison with Old CIPA

OLD CIPA NEW CIPA

• 1. Gap Analysis and

Benchmarking No Yes (Benchmarked against 5 international qualifications)

• 4. Average Study Duration

4 months 1.5 years

• 5. Study Textbooks

AAOIFI Standards FAR, AAE, BRE, SS&SG*

• 6. Fellowship Requirement

Examination Examination + PER** Report

• 7. Practical Experience

No Yes (1 year unless exempted)

• 2. Structure

Single course Four modules

• 3. Language

English and Arabic English (Arabic to be launched)

* FAR = Financial Accounting & Reporting AAE = Auditing, Assurance, & Ethics BRE = Business & Regulatory Environment SS&SG = Shari’ah Standards & Shari’ah Governance ** PER = Practical Experience Requirement

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The Numbers Behind the Effort

• No. of

Work Hours

~ 29,000

• No. of Days

1200

Team Size

47

• No. of

Meetings

200+

• No. of Pages

Edited from 3,000  1,600

Question Bank

2,000+ questions

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The Face of the Revamped CIPA

Financial Accounting and Reporting (FAR) Audit, Assurance, and Ethics (AAE) Business & Regulatory Environment (BRE) Shari’ah Standards & Shari'ah Governance (SS&SSG)

Details about the revamped CIPA certification

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The CIPA Syllabus – FAR Module

AAOIFI Financial Accounting Framework Murabaha Salam and Istisna Ijara and Ijara Muntahia Bittamleek Musharaka and Mudaraba Investment in Real Estate Investments in Associate and Subsidiary Investments in Securities Investment Accounts Investment Funds Accounting Islamic Insurance Zakah Foreign Currency Segment reporting IFS offered by conventional FI

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The CIPA Syllabus – AAE Module

Code of Ethics Intro and Objectives

• f Audit

Internal Audit Types of Assurance Client Acceptance and Continuance Audit Strategy and Planning Risk Assessment Audit Evidence Using the work of an Expert Other Audit services Audit Conclusion and Reporting

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The CIPA Syllabus – BRE Module

Business Environment Market Forces Business Strategies Marketing Communication within an Organization Forms and Types of Companies Management and Administration

• f a Company

Sources of Funding and Management Key Concepts

• f Law

Introduction to Tax Introduction to Risks within Financial Institutions Credit Risk Liquidity Risk Market Risk Operational and other Risks Capital Adequacy

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The CIPA Syllabus – SS&SG Module

Shari’ah Fundamentals Trade based Contracts Equity based Contracts Ijara and Ijarah Muntahia Bittamleek Investment Sukuk Islamic Equity Market Takaful Common Banking Services and

• ther Solutions

Corporate and Shari’ah Governance Shari’ah Supervisory Board Internal Shari’ah Audit/Review Independent External shari’ah Audit CSR

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Registration & Exam Schedule – May 2018

May 2018 Registration & Enrollment (R&E) Exam** Deadline 20 March 2018 FAR 7 May 2018 Registrations possible after deadline but with late fee*

• On Full Upfront Payment Option =

USD 150 as late fees

• On Easy Payment Option = USD 50

per installment as late fees

AAE 8 May 2018 BRE SS&SG 9 May 2018

* See together with CIPA Program Fees slide

* * Please check with AAOIFI before registration for availability of Exam Centre in your respective city of residence

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Registration & Exam Schedule – December 2018

Dec 2018 Registration & Enrollment (R&E) Exam** Deadline 01 November 2018 FAR 3 December 2018 AAE 4 December 2018 BRE SS&SG 5 December 2018

* See together with CIPA Program Fees slide

* * Please check with AAOIFI before registration for availability of Exam Centre in your respective city of residence

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Eligibility Criteria for CIPA Program Registration

• 1. Minimum eligibility requirement:
• Undergraduate
• r

postgraduate in discipline

• f

accounting, economics, business, or commerce with 55% marks;

• r
• relevant professional qualification.

NOTE: Exemptions available for academically strong Candidates having A levels / High School qualifications on case-to-case basis as well

• 2. Candidates must fulfill the eligibility criteria

at the time of applying for Fellowship (i.e. after passing all 4 modules and completing 1 year PER).

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Eligibility Criteria for Exemptions from Module Exams

Exemption from Module Exams

FAR Exemptions are generally not offered AAE Full exemption for holders of relevant professional qualifications in which they passed Advanced Auditing course (e.g. CPA, CA, ACCA (p7 paper passed) BRE Full or Partial exemption for holders of relevant professional qualifications (e.g. CPA, CA, ACCA, BIBF-ADIF) Additionally, see light green box. Full exemption offered to university students / graduates under Collaboration Agreement Program SS&SG Full exemption offered to all existing & future AAOIFI CSAA Fellows Full Exemption offered to university students / graduates or religious centers under Collaboration Agreement Program

BRE Full Exemption Notice Candidates may also be required to sign a ‘Study Confirmation’ certificate for BRE Study Text from Chapter E-01 (page 278) to Chapter F-01 (page 427) BRE Partial Exemption Notice Candidates may be required to write a 5000 words research paper on topic of Risk Management for Islamic financial Institutions

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Eligibility Criteria for Exemptions from PER

Exemption from Practical Experience Requirement (PER)

• Partial Exemption (6 months)
• At least 3 years of accountancy experience in an IFI; or
• At least 5 years of accountancy experience in a financial institution(s) (FI); or
• Membership of professional bodies which are IFAC members and at least 1 year of accountancy

experience in a financial institution(s)

• Full Exemption (12 months)
• More than 3 years of accountancy experience in an IFI; or
• More than 5 years of accountancy experience in a FI including at least 3 months of accountancy

experience in an IFI; or

• Membership of Professional bodies which are IFAC members with at least 6 months of accountancy

experience in an IFI.

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Key Benefits of Exemptions

You do not have to study for and pass the respective Module(s) Exam(s) You do not have to worry about paying additional Exam Resit Fee(s) in case you do not pass the Module(s) Exam(s) at first attempt You fast-track your studies by the length of duration you would had spent on studying and sitting for the respective Module(s) Exam(s)

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CIPA Program Fees w/ Flexible Payment Options (without discounts)

Pay in Full* Pay in 4 Installments* Pay in 2 Installments* $ 2,200 $700 per installment $1200 per installment Components Included in the Fees: a) Program Registration Fee, b) 4 Study Texts, c) Shipment Costs, d) 4 Mock Exams, e) 4 Exam Sittings (one sitting per module), f) PER Fee, g) CIPA Certificate Fee * Please see in connection with Discount slide

All fees are non-refundable. AAOIFI reserves the right to revise the fee structure at any time.

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CIPA Program Fees w/ Flexible Payment Options (with 10% and 20% discounts)

With 10% discount for AAOIFI Institutional Members

Pay in Full Pay in 4 Installments Pay in 2 Installments $ 1,980 $ 630 per installment $ 1,080 per installment

Components Included in the Fees: a) Program Registration Fee, b) 4 Study Texts, c) Shipment Costs, d) 4 Mock Exams, e) 4 Exam Sittings (one sitting per module), f) PER Fee, g) CIPA Certificate Fee

With 20% discount for Developing Islamic Finance Markets

Pay in Full Pay in 4 Installments Pay in 2 Installments $ 1,760 $ 560 per installment $ 960 per installment

Components Included in the Fees: a) Program Registration Fee, b) 4 Study Texts, c) Shipment Costs, d) 4 Mock Exams, e) 4 Exam Sittings (one sitting per module), f) PER Fee, g) CIPA Certificate Fee

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CIPA Program Fees (Other Fees)

Late Registration Fee USD 100 per exam Exam Resit Fees USD 200 per module PER Re-verification and Re- assessment fees USD 200 Exam Re-check Fee USD 100 per module Annual Fellowship Fee USD 100 Certificate Re-issuance Fee USD 100

NOTE: other Fees may also apply

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Study Options for CIPA Candidates

Study Options Self-Study

[AAOIFI will provide 4 Study-Texts]

Training Providers

[AAOIFI will make available list of training providers for CIPA on its website]

E-Learning

[In progress]

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CIPA Examinations

Total No. of Exams 4 Passing Percentage 70% for each Module Exam Composition MCQs covering theoretical and scenario-based questions

• Max. No. of Exam Attempts

There is no limitation on the number of exam attempts Type of Exam Physical (Online Exams will be launched shortly) Exam Duration for FAR AAE BRE SS&SG 3 hours 1.5 hours 1.5 hours 2 hours Total Exam Questions ~100 ~65 ~65 ~85

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Practical Experience Requirement (PER)

What is PER? Internship Program for 1 year at a pre-approved Islamic Financial Institutions (IFI) under an External Supervisor Objective of PER To give candidate a hands-on real-world understanding of and to enhance their skillset in accounting for IFIs Eligibility Criteria All registered CIPA Candidates may start their PER after registration but preferably after passing the FAR module Exemptions Available; criteria defined earlier Deliverable Periodic and Final Report Passing Criteria Pass or Fail Alternative to PER To be decided on case-to-case basis; As an alternative, CIPA Candidate may be required to submit 2 research papers on Islamic Accountancy of up to or between 5,000 – 7000 words.

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How PER will work ?

Identify a local Islamic Bank & Supervisor

Share the contact details of the Bank and Supervisor with AAOIFI AAOIFI would approve your Bank & External Supervisor in writing

Develop a 1 year “Job Description”

List down your experience outcomes in terms of knowledge and skills 50% of your time should be spent on accountancy related tasks

Submit Periodic Reports

Update AAOIFI about your ongoing work & progress established against experience

• utcomes

Assign % time allocated to each task The Supervisor will have to sign-off each periodic report with his/her comments

Submit Final Report

Final Report shall attempt to compare & contrast practices with

• ther banks +

identifying gap between theory and practice Candidate will have to supplement their learning with research to make a case of their conclusions and recommendations

Result

AAOIFI may seek an interview with the Candidate and/or the Supervisor before grading the Final Report A ‘Pass’ Grade is required to fulfill the PER for AAOIFI Fellowship

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Complete Practical Experience Requirement

Fellowship Requirement

Pass all 4 CIPA Exams Pass all 4 CIPA Module Exams

NOTE: An annual CIPA Fellowship Fee is payable in order to retain the Fellowship status

Fulfill Eligibility Criteria for CIPA Program

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FAQ

Q. Is CIPA for me? A. Yes—why not, especially if you belong to the Islamic banking & finance industry and are / or aspiring to specialize in accounting for Islamic Financial Institutions (IFIs). CIPA is designed to equip candidates like yourself with the requisite technical understanding and professional skills on accountancy and related fields. Q. Am I eligible for CIPA? A. Eligibility criteria for CIPA program registration is flexible. If you have a relevant undergraduate / graduate degree or have a relevant professional qualification (such as CPA, ACCA, CA, etc.), then you are eligible to register for CIPA

• program. In case you do not meet either of the criteria, we are still flexible enough to accommodate requests for

registration on case-to-case basis. Q. Can I register for CIPA while still studying for my undergraduate degree? A. Yes, you may register for CIPA program despite not fulfilling the eligibility criteria. That is because the eligibility criteria does not apply at the start of the program (i.e. at time of registration) but rather at the time of applying for CIPA Fellowship (which happens after passing all 4 modules of the CIPA program and completing the Practical Experience Requirement). In short, whereas you can register for CIPA at any time, you would need to fulfill the eligibility criteria in

• rder to earn the CIPA fellowship.

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FAQ – contd.

Q. Can I sit for all 4 exams in one-go? A. Yes, you may. Q. How can I complete the PER if there are no Islamic banks in my country (or the Islamic Bank is not entertaining my request for PER with them?) A. The idea of PER is to give you a hands-on, real-world experience of accountancy in an Islamic Bank. In case there are no Islamic Banks in your city / country, we would encourage you to identify and connect with one outside of your country through the internet. If that is even not possible, then you would be required to submit 2 research papers of up to or between 5,000 and 7,000 words on a pre-approved ‘Islamic Accountancy’ topic as an alternative to PER. Decision regarding PER will be made on case-to-case basis. Q. Does the ‘External Supervisor’ need to be an employee of a Bank where I am completing my PER? A. Not really. The Supervisor can be anybody approved by AAOIFI and who has shown strong commitment to mentoring you over the full course of one year. Q. I am employed and cannot complete PER. What should I do? A. PER need not be a full-time job, though highly recommended by AAOIFI. PER can also be completed through periodic physical or online meetings at the approved institution and with External Supervisor.

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FAQ – contd.

Q. How can I register myself for the CIPA certification and become a CIPA Candidate? A. Until the online registration portal is made available, applicants are requested to fill out the following forms and submit to AAOIFI at (cipa@aaoifi.com): i) Registration Form (so that we may have your bio, academic, and professional documents); ii) Exemptions Form (so that we may know whether you are seeking exemptions and in what courses / PER); iii) Payment Option Form (so that we may know whether you want to pay lump sum or in 2 or 4 installments); and iv) Exam Form (so that we know when you want to sit for the CIPA exam(s)). All forms are available at AAOIFI website (www.aaoifi.com) Upon receipt of the above four forms, we will issue: i) Exemption Offer Letter (mentioned whether you qualify for exemptions and in which courses/PER); ii) Invoice (for the payment of CIPA program fees as per selected payment

• ption); and iii) Exam Confirmation (confirming you as an Exam Candidate for the respective selected Exam Window).

Upon receipt of CIPA program fees, we will issue a ‘Candidate Registration Number’ (CRN)—thus officially recognizing you as a CIPA Candidate Q. How much time will it take me to acquire the CIPA Fellowship? A. Under normal circumstances (when you do not acquire any exemptions and sit for two exams per Exam Window), you will complete CIPA in 1.5 years: during the first exam window you will pass all four modules and in the second year you will complete the PER. Obviously, if you acquire exemptions, you fast-track your journey to acquiring CIPA fellowship.

THANK YOU FOR YOUR PATIENCE Looking forward to you CIPA Candidacy soon!