AIS in Islamicbank:Islamic Bank uses an automatedaccounting information system called “Oracle”.
One of the reasons that encouraged thebank to use this system is that Oracle has been the leader in database softwarefor more than 35 years.Oracle Financials Accounting Hub (FAH)allows you to efficiently create detailed, auditable, reconcilable accountingfrom a variety of source systems. It includes an accounting transformationengine with extensive validations plus accounting and rules repositories. Thetransformation engine consistently enforces accounting policies. Therepositories provide centralized control; detailed audit trails, andsimultaneously accommodates diverse corporate, management and reportingrequirements.The major subsystems of Islamic Bank:o Generalledger and financial reporting system: to compare the required financialstatements.o FixedAssets System: operates purchasing, maintenance and selling of assets.
o TransactionProcessing System: improves day to day transactions. ACCOUNTING CYCLESAs BisB is a non- manufacturing company, itconsists of only four cycles. The four cycles are as follows: 1. REVENUE CYCLEThe revenue cycle is a set of repeated activities andinformation processed related to services provided and payment received. Abanks revenue sources and cycle is demonstrated below:1. Investments:Ø BISB put resources into diverse projects: Invest in Real estate· Musharakah in Real estates: BISB incomefrom.
Musharakah On 2015 Furthermore 2016 need aid BD110, 263 What’s more BD106,761 separately. · Mudaraba investments Income is recognizedwhen the right to receive payment is established or on distribution by theMudarib. Investment of Associate · BISB Investment in associates comprisesof: · Takaful International Company B.
s.c · Liquidity Management Centre B.S.
C. · Arabian C Real Estate Company · AlDur Energy Investment Compan Invest in Securities: o Debt type instruments: · Sukuk: Issues bonds with legitimate contractit is committed to its provisions. It consist of: Central Bank of Bahrain Sukuk and Corporate Sukuk Equity type instruments: · Shares: BISB total Investment has reached208 million BD in 2014 and gradually decreases in 2015 and 2016 to BD 208 andBD 200 million respectively 2. Othersources of revenue: BISB mainly uses thefollowing to obtain revenue:(i) Murabaha:Income from Murabaha and Wakala contracts is recognized on a time-apportionedbasis over the period of the contract using the effective profit rate method.(ii) Ijara: condition of the Ijara will promiseto own except that at the time of signing the agreement the property is underconstruction (iii) Ijara with ownership: Income from ijarawith ownership is recognized proportionately over the lease term.
(iv) Dividendincome: Dividends are recognized when the right to receive payment isestablished. Ø The procedures of the bank to obtain revenue: (i) Thecustomer visit BISB and request the financial service he is willing to take. (ii) The customer service must provide thecustomer with the suitable application forms for the request.(iii) Thecustomer should fill all the information required in the application form and bringall documents required. (iv) The employee checks if all the documentsare appropriate then send it to the credit department to verify the request.
(v) After approval from credit department, therequest will go back to the customer service employee which will providerecommendation for customer’s method of collection.(vi) Finally, the transaction will be recorded bythe operation department.