The article discusses various contemporary issues in Islamic finance, including the principles, progress, and prospects of this financial system. It covers topics such as the origins and fundamentals of Islamic banking, the development of Islamic mutual funds in Malaysia, credit risk in Islamic financial products, and business firm attitudes towards Islamic finance methods. The researchers also explore determinants of credit risk in Bangladeshi and Malaysian Islamic banks, as well as prospects, barriers, and impediments to Islamic banking in Libya. Additionally, the article presents Malaysian evidence on the performance of Islamic mutual funds and the Shariah audit of financial statements in Islamic financial institutions. The transformation of risk management practices in Islamic banking is also discussed in the article.