Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)

هيئة المحاسبة والمراجعة للمؤسسات المالية الإسلامية

An international not-for-profit body based in Bahrain, established by an agreement signed in Algiers on 26 February 1990, which sets accounting, auditing and Shariah standards for Islamic financial institutions; it has members from more than 45 countries, and regulators in several states apply its standards.

Summary

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is a Bahrain-based not-for-profit organisation established to maintain and promote Shariah standards for Islamic financial institutions, participants and the industry as a whole. ¹ It runs professional development programmes, among them the Islamic legal accountant programme and a forensic auditing programme. ¹

Founding

It was established under an Agreement of Association signed by Islamic financial institutions in Algiers on 26 February 1990, and registered in Bahrain on 27 March 1991. ¹ It has members from more than 45 countries, including central banks and Islamic financial institutions. ¹

Reach of its standards

Its standards are applied in Bahrain, the Dubai International Financial Centre, Jordan, Lebanon, Qatar, Sudan and Syria, and the authorities in Australia, Indonesia, Malaysia, Pakistan, Saudi Arabia and South Africa have issued guidelines derived from them. ¹

Structure

It has a general assembly, a board of trustees and an accounting and auditing standards board of fifteen part-time members each, a Shari'ah committee, an executive committee, and a full-time secretary-general heading the general secretariat. ¹

References

English Wikipedia, "Accounting and Auditing Organization for Islamic Financial Institutions", revision 1383303015. ¹

Islamic banks and conventional banks — the difference, the doubts and the performance

The two 'Al-Wasatiyya' episodes on Islamic banks. In the first, 56% of the studio audience said they could not define riba, 79% that they knew nothing of the murabaha, mudaraba, tawarruq and salam contracts, and they split into thirds on whether Islamic banks are free of doubt; in the second, 65% chose to buy by murabaha from an Islamic bank, 57% thought abolishing riba impossible while the world economy runs on interest, and 49% judged Islamic banks' social role weaker. The guests agreed that conventional bank interest is riba and differed over the existing Islamic banks.

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)

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Islamic banks and conventional banks — the difference, the doubts and the performance