AAOIFI CPSS case studies
AAOIFI CPSS · Put your knowledge to work in context.
The Certified Professional in Shari'ah Standards (CPSS) is an AAOIFI certification for professionals working with Islamic finance standards. This page is an independent study resource and is not affiliated with, endorsed by, or operated by AAOIFI. Important limitation: the official AAOIFI pages retrieved for this profile did not contain usable CPSS program details. The page cached at the CPSS URL was unrelated commercial content, and the certifications page returned a 404 error. Topics on this exam: Shari'ah Standards, Accounting Standards, Governance Standards, and Code of Ethics. The AAOIFI CPSS case studies are 4 cases and about 2,669 words.
1Murabaha with a Late-Payment Penalty Funded to Charity
Bayt Finance, an Islamic retail bank, books a murabaha home-financing portfolio of USD 42 million. The murabaha contract fixes the sale price at cost plus a disclosed profit markup, payable in 120 monthly instalments. The bank's product manual adds a clause: on late payment the customer owes 0.05% of the overdue instalment per day, and the bank records this amount as 'penalty income' in its profit-and-loss account. During the year the bank collected USD 310,000 under this clause and recognised all of it as revenue.
677 words, about 3 min2Musharakah Mutanaqisah: Recognising Profit Before It Is Earned
Sahara Bank enters a diminishing musharakah (musharakah mutanaqisah) for a commercial property worth USD 5,000,000. The bank contributes USD 4,000,000 (80%) and the customer USD 1,000,000 (20%). The agreement provides for the customer to buy out the bank's share in 20 quarterly units, and for profit to be shared 80:20 in proportion to capital. The property generates rental income of USD 400,000 in year one.
638 words, about 3 min3Independence of the Shari'ah Supervisory Board
A small Islamic bank has a three-member Shari'ah Supervisory Board (SSB). One member, Sheikh A, also sits on the board of a company that is the bank's largest murabaha customer and receives a consulting fee from that customer. A second member, Dr B, is paid a performance bonus by the bank linked to the growth of its tawarruq book. The third member, Dr C, is independent.
653 words, about 3 min4A Gift, a Conference and a Regulator's Deadline
Omar is a compliance officer at an Islamic bank. A corporate customer, whose murabaha facility is up for annual review, invites him to a two-day industry conference in another city, offering to cover flights, hotel and a 'hospitality package' worth about USD 2,500. The customer's file has an open finding: two instalments were late last quarter and the file is awaiting Omar's sign-off. Separately, a regulator has asked for a report by Friday.
701 words, about 4 min