Accounting and Auditing Organization for Islamic Financial Institutions explained

Accounting and Auditing Organization for Islamic Financial Institutions
Abbreviation:AAOIFI
Formation:[1] in Algeria.
Founders:Islamic Development Bank, Dallah Al-Baraka, Faysal Group (Dar Al Maal Al Islami), Al Rajhi Banking & Investment Corporation, Kuwait Finance House and Al-Bukhary Foundation
Type:Independent international not-for-profit organization
Purpose:Standardization[2] [3] and harmonization of international Islamic finance practices and financial reporting in accordance to Sharia[4] [5] [6]
Headquarters:Manama, Bahrain
Location:Yateem Center, Block: 304, Al-Muthana road
Region Served:Worldwide
Language:English, Arabic
Main Organ:General Assembly

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)[7] is a Bahrain-based not-for-profit organization that was established to maintain and promote Shariah standards for Islamic financial institutions, participants and the overall industry.[8] The commission also organizes a number of professional development programs (especially the Islamic legal accountant program, observer program and forensic auditing program) in their effort to improve the industry.[9]

History

AAOIFI was established in accordance with the Agreement of Association which was signed by Islamic financial institutions on 26 February 1990 in Algiers. Then, it was registered on 27 March 1991 in Bahrain. It has members from more than 45 countries,[10] including central banks and Islamic financial institutions and other parties working in the financial industry and banking, Islamic International.

The commission has obtained support for the application of the standards issued by it, where these standards have been applied in the Kingdom of Bahrain and the Dubai International Financial Centre, Jordan, Lebanon, Qatar, Sudan and Syria. The competent authorities in Australia, Indonesia, Malaysia, Pakistan, Saudi Arabia and South Africa issued guidelines derived from the standards and publications.[11]

Organizational structure

The organizational structure of AAOIFI includes a general assembly. AAOIFI also has a board of trustees and an accounting and auditing standards board each consisting of fifteen part-time members, a Shari'ah committee consisting of four part-time members, an executive committee, and a secretary-general who is a full-time executive and heads the general secretariat.[12]

Objectives

The objectives of AAOIFI are:

AAOIFI carries out these objectives in accordance with the precepts of Islamic Shari'a which represents a comprehensive system for all aspects of life, in conformity with the environment in which Islamic financial institutions have developed. This activity is intended both to enhance the confidence of users of the financial statements of Islamic financial institutions in the information that is produced about these institutions, and to encourage these users to invest or deposit their funds in Islamic financial institutions and to use their services.

Notes and References

  1. PhD . Sajid P.P. . Role of Islamic Microfinance in Bahrain Since 2000 . Jamia Milia Islamia University . Shodhganga . Islamic Banking in the Gulf . 66 . 10603/195473 . free.
  2. PhD . Shusak Aroonpoolsup . Islamic financial markets: performance and prospects . Aligarh Muslim University . Shodhganga . Bibliography . 291 . 10603/11410 . free.
  3. PhD . Waheed, Khalid . Critical study of murabahah as an Islamic mode of financing . Aligarh Muslim University . Shodhganga . Concept of Murabahah . 146 . 10603/241907 . free.
  4. PhD . Sajid P.P. . Role of Islamic Microfinance in Bahrain Since 2000 . Jamia Milia Islamia University . Shodhganga . Islamic Banking in the Gulf . 67 . 10603/195473 . free.
  5. PhD . Smeet Esore . Experiments in Islamic Banking: a case study of Saudi Arabia and Thailand . Aligarh Muslim University . Shodhganga . The Concept and Functioning of Islamic Banking System . 48 . 10603/182917 . free.
  6. PhD . Yaqoob, P K . Case for interest free financial institutions in Kerala . 2009 . Mahatma Gandhi University . Shodhganga . Theoretical Frame Work . 96 . 10603/27094 . free.
  7. PhD . Sajid P.P. . Role of Islamic Microfinance in Bahrain Since 2000 . Jamia Milia Islamia University . Shodhganga . Abbreviations . 8 . 10603/195473 . free.
  8. PhD . Sajid P.P. . Role of Islamic Microfinance in Bahrain Since 2000 . Jamia Milia Islamia University . Shodhganga . Islamic Economics, Banking and Microfinance: Theoretical Perspectives . 59 . 10603/195473 . free.
  9. Web site: Adam Hayes . Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) . Investopedia . 30 October 2013.
  10. PhD . Sajid P.P. . Role of Islamic Microfinance in Bahrain Since 2000 . Jamia Milia Islamia University . Shodhganga . Islamic Banking in the Gulf . 68–69 . 10603/195473 . free.
  11. Web site: Our History . Accounting and Auditing Organization for Islamic Financial Institutions . 30 October 2013 . https://web.archive.org/web/20131101055608/http://aaoifi.com/en/about-aaoifi/our-history.html . 1 November 2013 .
  12. Accounting and Auditing Standards for Islamic Financial Institutions . Proceedings of the Second Harvard University Forum on Islamic Finance: Islamic Finance into the 21st Century . 15 November 2013 . Rifaat Ahmed Abdel Karim . 2 . https://web.archive.org/web/20140530180222/http://ifp.law.harvard.edu/login/view_pdf/?file=Accounting%20and%20Auditing%20Standards%20for%20Islamic%20Financial%20Institution.pdf&type=Project_Publication . 30 May 2014.

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