Auditing Financial Institutions

Auditing Financial Institutions

Question:

Mufti sahb,

I work for an auditing/accounting firm.

We audit many companies in Canada including many financial institutions and insurance companies etc. A lot of these companies deal with interest and insurance.

Is it permissible to audit their financials?

I await your reply

Answer:

In the name of Allah, Most Compassionate, Most Merciful,

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Financial auditing is the process of examining the financial records of an organization or individual to determine their accuracy and conformity with any applicable rules such as regulationsand laws.

In principle, it is permissible to audit any institution as one is merely checking financial statements and reporting accordingly. The auditor is not directly involved in any of the Haram aspects of the institutions.[i]

And Allah Ta’āla Knows Best

Hammad Ibn Ismail Jogiat

Student - Darul Iftaa

Cambridge, Ontario, Canada

Checked and Approved by,

Mufti Ebrahim Desai.

فتح الباري لابن حجر (4/ 314)[i]

وَهَذَا إِنَّمَا يَقَعُ عَلَى مَنْ وَاطَأَ صَاحِبَ الرِّبَا عَلَيْهِ فَأَمَّا مَنْ كَتَبَهُ أَوْ شَهِدَ الْقِصَّةَ لِيَشْهَدَ بِهَا عَلَى مَا هِيَ عَلَيْهِ لِيَعْمَلَ فِيهَا بِالْحَقِّ فَهَذَا جَمِيلُ الْقَصْدِ لَا يَدْخُلُ فِي الْوَعِيدِ الْمَذْكُورِ وَإِنَّمَا يَدْخُلُ فِيهِ مَنْ أَعَانَ صَاحِبَ الرِّبَا بِكِتَابَتِهِ وَشَهَادَتِهِ

Contemporary Fatawaa, Vol 162, Idara-e-Islamiat

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