An Introduction to the

CIPA Program

Mr. Farhan NoorH e a d , P r o f e s s i o n a l D e v e l o p m e n t

f n o o r @ a a o i f i . c o m | + 9 7 3 1 7 3 7 5 4 1 2 E x t : 4 1 2

AAOIFI Background

3

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 protect and enhance the integrity

of the global Islamic banking &

finance industry

Mission

Vision

Standardization and harmonization of

international Islamic finance

practices and financial reporting in

accordance to Shari’ah.

4

AAOIFI Areas of Work

01

02

03

04

Certification of Compliance

Conferences & EventsTwo 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

of

Compliance

Certifications of compliance to AAOIFI Standards

offered 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

5 Standards Development Boards & No. of Standards Issued to Date ( by December 2017 )

33Standards Issued

10Standards Issued

60 Standards Issued

Accounting (and Auditing)

Board (AAB)

Governance & Ethics

Board (AGEB)

Shari’ah Board (ASB)

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.

Professional Development

7 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

8

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

9

30 Exam Centers in 22 Countries Around the World

Bahrain

UAE

KSA

Qatar

Kuwait

Lebanon

Jordan

Syria

Turkey

Pakistan

Malaysia

South Africa

Mauritania

Sudan

Egypt

Libya

Tunisia

Morocco

Algeria

UK

Indonesia Sri Lanka

Why get the CIPA Qualification?

11

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

of 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

13

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

14

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 2 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 and Arabic

*

FAR = Financial Accounting & Reporting

AAE = Auditing, Assurance, & Ethics

BRE = Business & Regulatory Environment

SS&SG = Shari’ah Standards & Shari’ah Governance

**

PER = Practical Experience Requirement

15

The Numbers Behind the Effort

No. of

Work Hours

~ 29,000

No. of Days

1200

Team Size

47

No. of

Meetings

200+

No. of PagesEdited from 3,000 1,600

Question Bank2,000+ questions

16

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

18

The CIPA Syllabus – FAR Module

AAOIFI Financial Accounting Framework

MurabahaSalam 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

ZakahForeign

CurrencySegment reporting

IFS offered by conventional FI

19

The CIPA Syllabus – AAE Module

Code of EthicsIntro and Objectives

of AuditInternal Audit Types of Assurance

Client Acceptance and Continuance

Audit Strategy and Planning

Risk Assessment Audit Evidence

Using the work of an Expert

Other Audit servicesAudit Conclusion

and Reporting

20

The CIPA Syllabus – BRE Module

Business Environment

Market ForcesBusiness Strategies

MarketingCommunication

within an Organization

Forms and Types of

Companies

Management and

Administration of a Company

Sources of Funding and Management

Key Concepts of Law

Introduction to Tax

Introduction to Risks within

Financial Institutions

Credit Risk

Liquidity Risk Market RiskOperational

and other RisksCapital

Adequacy

21

The CIPA Syllabus – SS&SG Module

Shari’ah Fundamentals

Trade based Contracts

Equity based Contracts

Ijara and IjarahMuntahia

Bittamleek

Investment Sukuk

Islamic Equity Market

Takaful

Common Banking

Services and other Solutions

Corporate and Shari’ah

Governance

Shari’ah Supervisory

Board

Internal Shari’ah

Audit/Review

Independent External

shari’ah AuditCSR

22

Registration & Exam Schedule – June 2018

June 2018 Registration & Enrollment (R&E) Exam**

Deadline 01 May 2018 FAR 4 June 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

5 June 2018BRE

SS&SG 6 June 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

23

Registration & Exam Schedule – December 2018

Dec 2018 Registration & Enrollment (R&E) Exam**

Deadline 01 November 2018 FAR 3 December 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

AAE4 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

24

Eligibility Criteria for CIPA Program Registration

1. Minimum eligibility requirement:

• Undergraduate or postgraduate in

discipline of accounting, economics,

business, or commerce with 55% marks;

or

• 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).

25

Eligibility Criteria for Exemptions from Module ExamsEx

emp

tio

n f

rom

Mo

du

le E

xam

s

FARExemptions are generally not offered – however, may be considered on

case-to-case basis

AAEFull exemption for holders of professional qualifications in which they

passed Advanced Auditing course

BRE

Full exemption for holders of professional qualifications

Full exemption for University students and graduates under Collaborative Agreement Program (e.g. for BIBF graduates)

SS&SG

Full exemption offered to all existing & future CSAA Fellows

Full Exemption offered to university students /graduates or religious centers under Collaboration Agreement Program

BRE Exemption Notice

Candidates may be required to write a 3000+ words research paper on

topic of Risk Management for Islamic

financial Institutions

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)

26

Eligibility Criteria for Exemptions from PER

Exemption from PER

• Partial Exemption (6 months)

• Up to 3 years of accountancy experience in an IFI; or

• Up to 5 years of accountancy experience in a financial institution(s); 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 for financial institutions and at least 3 months of

accountancy experience in an IFI; or

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

experience in an IFI.

27

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)

28 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 ExamSittings (one sitting per module), f) PER Fee, g) CIPA Certificate Fee

* Please see in connection with Discount slideAll fees are non-refundable.

AAOIFI reserves the right to revise the fee structure at anytime.

29 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

30

CIPA Program Fees (Other Fees)

Exam Resit Fees USD 200

PER Re-verification and Re-assessment fees

USD 200

Exam Re-check Fee USD 50 per exam

Annual Fellowship Fee USD 200

Certificate Re-issuance Fee USD 100

NOTE: other Fees may also apply

31

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]

32

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 Attempts There is no limitation on the number of 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

33

Practical Experience Requirement (PER)

What is PER? Internship Program for 1 year at an approved organization under an

External Supervisor

Objective of PER To give candidate a hands-on real-world understanding and enhance their

skillset in accounting for IFIs

Eligibility Criteria All registered CIPA Candidates may start their PER after registration

Exemptions Available; criteria defined earlier

Deliverable Final Report

Passing Criteria Earn a ‘Pass’ on your Final Report

Alternative to PER To be decided on case-to-case basis; 10,000 word thesis submission on a

pre-approved topic

34

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

outcomes

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

other 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

35

Complete Practical

Experience

Requirement

Fellowship Requirement

Pass all 4 CIPA Exams

Pass all 4

CIPA Module

Exams

NOTE: An annual CIPA Fellowship Fee of USD 200/- is payable in order to retain the Fellowship status

Fulfill Eligibility

Criteria for CIPA

Program

36

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

order to earn the CIPA fellowship.

37

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. Even if that is not possible, then you would be required to submit a 10,000 word thesis on

a pre-approved 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.

38

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

option); 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 (where you do not acquire any exemptions and sit for two exams per Exam Window), you

will complete CIPA in 2 years: during the first year 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 PATIENCELooking forward to you CIPA Candidacy soon!