Purpose - This paper aims to examine some issues in IFRS9 with regards to classification and measurement of Islamic financial assets. In addition, the paper discusses the Shariah concerns on the use of fair value to measure financial assets. Design/methodology/approach - This paper adopts qualitative method via the study of documents and textual analysis of Shariah opinions of scholars and relevant accounting standards. Findings - The paper found that the classification and measurement of equity- based Islamic financial assets do not fit into the "default" classification category of amortised cost, as the future cash flow receivable does not constitute solely the payment of principal and interest (fixed rate payment). With regards to fair value measurement, Shariah concern arises during the adoption of fair value at Level 2 (reference of asset values from input other than quoted prices in active markets) and Level 3 (use of discounted cash flow method to arrive to asset valuation) because of the existence of in uncertainty or gharar as compared to Level 1 (fair value referred to quoted prices of similar assets). Practical implications - Findings of the paper provide a starting point for a debate and extensive research on issues related to classification and measurement of Islamic financial assets and the use of fair value as a method of subsequent revaluation of Islamic financial assets. The Shariah analysis in the paper is useful for International Accounting Standard Board to engage with Islamic financial institutions and local accounting standard setters to reflect the unique nature of Shariah- compliant financial instruments. The paper serves as a basis to devise technical solutions to address accounting and reporting issues of Islamic financial instruments. Originality/value - The paper offers Shariah analysis on the issue of classification, measurement and impairment model for Islamic financial assets. The paper is considered as the first paper that examines areas of possible tensions when applying IFRS9 to the accounting of Islamic financial assets. In addition, the paper has contributed to the literature in Islamic accounting and auditing.

The shari'ah audit function within the Islamic financial institutions (IFIs) provides assurance on IFI's compliance with shari'ah principles. Currently, IFIs in Malaysia are experiencing a shortage of qualified shari'ah auditors (SAR) to perform the shari'ah audit function. This paper aims to explore the specific elements of knowledge, skills and other characteristics (KSOC) required of SAR in carrying out their tasks effectively. A multiple-case study involving various types of IFIs were conducted to gather insights on current practices of recruiting SAR and determine the relevant KSOC for SAR. In total, 31 respondents were interviewed comprising representatives from the regulator, SAR, and Heads of Shari'ah Audit Department of selected participating IFIs. The findings reveal that shari'ah knowledge is the essential knowledge component, followed by knowledge of Islamic banking operation and knowledge of Fiqh Muamalat. For the skill component, auditing is revealed as the main skill required of SAR to be considered as competent. In addition, this study finds that SAR must also have the willingness to learn attitude as a complementing characteristic to the knowledge and skill elements identified above, as a package requirement for a competent shari'ah auditor. This research contributes to the importance of competency practice among Islamic banking personnel. It also contributes to the management policy in the recruitment or training of shari'ah auditing professionals of IFIs in Malaysia.

The present paper seeks to fulfil the gap of knowledge in crude palm oil futures (FCPO) by employing unobserved component (UC) methodology. It may perhaps be the first study in Malaysian capital market to examine FCPO prices using UC model. The empirical results indicate that FCPO presents a permanent behaviour. The transitory component exhibits a higher degree of persistence with a periodicity of approximately one year. In addition, the model of the study has proven its ability to capture unobserved characteristics of FCPO's time series price and has shown a satisfactory performance for the sampled period in terms of fit. This study implicates that understanding the cyclical pattern, duration, and persistence provides important information that would help to create an appropriate strategy to manage risks, smooth and stabilise returns over the FCPO cycle. Such a strategy would ensure the stability and sustainability of the FCPO market.