Professional Documents
Culture Documents
Time allowed:
3 hour 00 minutes
General Instructions:
(Specific instructions by
subject Lecturer - )
2014
SECTION A 40 marks
Answer three questions, question 1 is compulsory
1. The Quran forbids the charging of riba on money lent. The Shariah disallows riba and there
is now a general consensus among Muslim economists that riba is not restricted to usury but
encompasses interest as well. As revealed in Surah Ar-Rum verse 39,
And whatever you give for interest to increase within the wealth of people will not increase with
Allah. But what you give in zakah, desiring the countenance of Allah - those are the multipliers.
(Sahih International)
a) Explain the difference between (i) riba al-nasiah and (ii) riba al-fadl.
(8 marks)
b) What are the misconceptions about the present day interest? Provide arguments to
(12 marks)
2. Shariah requires the subject matter to be in existence at the time of sale. However, two
contracts are exempted from this rule. Examine the two (2) contracts.
(10 marks)
3. The Islamic economic system relies upon vibrant markets for equity-based securities.
However, a Shariah-based formal model for a stock market is yet to be formulated due to
some major structural issues. Discuss these issues.
(10 marks)
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2014
4. The need for accounting records as means for trust building is emphasized in the Quran;
O you who have believed, when you contract a debt for a specified term, write it down. And let a scribe write [it]
between you in justice. Let no scribe refuse to write as Allah has taught him. So let him write and let the one who
has the obligation dictate. And let him fear Allah, his Lord, and not leave anything out of it. But if the one who has
the obligation is of limited understanding or weak or unable to dictate himself, then let his guardian dictate in
justice. And bring to witness two witnesses from among your men. And if there are not two men [available], then a
man and two women from those whom you accept as witnesses - so that if one of the women errs, then the other
can remind her. And let not the witnesses refuse when they are called upon. And do not be [too] weary to write it,
whether it is small or large, for its [specified] term. That is more just in the sight of Allah and stronger as evidence
and more likely to prevent doubt between you, except when it is an immediate transaction which you conduct
among yourselves. For [then] there is no blame upon you if you do not write it. And take witnesses when you
conclude a contract. Let no scribe be harmed or any witness. For if you do so, indeed, it is [grave] disobedience in
you. And fear Allah. And Allah teaches you. And Allah is Knowing of all things. (2:282).
What are the broad objectives of Financial Accounting and Reporting for Islamic Financial
Institutions?
(10 marks)
SECTION B 60 marks
Answer any 3 questions
(10 marks)
b) Identify and explain two (2) contracts an Islamic Bank may use for financing their funds.
(10 marks)
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2014
a. From your knowledge, structure a Sukuk that would best cater to the situation of
Fenaka Corporation. You are required to explain the structure of Sukuk as well.
(15 marks)
b. What factors impede the growth of Sukuk markets?
(5 marks)
3. Currently there are various takaful business models that are being used in the various
jurisdictions throughout the world, namely:
The Mudharaba Model
The Wakalah Model
The Hybrid Model
The Waqf Model
a. Explain the modus operandi of a pure Mudharaba model for providing takaful services.
(15 Marks)
b. What are the key differences between conventional insurance and takaful?
(5 Marks)
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2014
END of Paper
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