Compliance with participation banking principles and auditing tawarruq product

Banking has always been of critical importance for financial sector from past to present. Participation banking, which has been increasing its volume in the world and in our country, has taken place in finance sector in modern sense after the 1950s in order to meet the banking needs of all segments of the society. In this study, the contributions of auditing standards published by AAOIFI (The Accounting and Auditing Organization for Islamic Financial Institutions) for independent auditors and translated into Turkish by POC (Public Oversight Accounting and Auditing Standards Authority), on internal auditing are examined. In addition, the central advisory board established under PBAT and the advisory committees of banks, which were established to ensure the standard in participation banking in our country, are examined. The relationship between the participation banking independent and internal audit is discussed comparatively. The internal audit structure of tawarruq product, which is frequently used in participation banks in our country recently, is handled as a case. Tawarruq, which is basically used to obtain cash, is used by participation banks in our country to restructure the debts of customers who cannot pay their debts, to provide liquidity for participation banks and to provide loans in cases where there is no invoice. In the study, audit manual was created for tawarruq and risks were determined. A field audit as case study was carried out by internal auditor by establishing control points by making use of the PBAT and AAOIFI Tawarruq standards. The internal audit was concluded with the reporting activity, which includes findings and suggestion and executive summary.