Accounting and Auditing Organization for Islamic Financial Institutions

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Accounting and Auditing Organization for Islamic Financial Institutions
Abbreviation AAOIFI
Motto Developing Islamic accounting and auditing thoughts
Formation February 26, 1990; 24 years ago (1990-02-26)
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 and harmonization of international Islamic finance practices and financial reporting in accordance to Sharia
Headquarters Manama,  Bahrain
Location
  • Yateem Center, Block: 304,Al-Muthana road
Coordinates 26°14′2″N 50°34′38″E / 26.23389°N 50.57722°E / 26.23389; 50.57722
Region served
Worldwide
Official language
English, Arabic
Main organ
General Assembly
Website www.aaoifi.com

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) 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.The Commission also organizes a number of professional development programs (especially the Islamic legal accountant program and the observer program and forensic auditor) in their effort to upgrade the human resources working in the industry and the development of governance structures controls the institutions.[1]

Incorporation[edit]

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.cAs an independent international organization, enjoys the support of a large number of institutions with such legal persons around the world (200 members from more than 45 countries, so far), including central banks and Islamic financial institutions and other parties working in the financial industry and banking, Islamic International. The Commission has obtained great support for the application of the standards issued by it, where these standards are dependent today 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.[2]

Organizational Structure[edit]

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.[3]

Objectives[edit]

The objectives of AAOIFI are:

  • To develop accounting and auditing thoughts relevant to Islamic financial institutions
  • To disseminate accounting and auditing thoughts relevant to Islamic financial institutions and its applications through training, seminars, publication of periodical newsletters, carrying out and commissioning of research and other means
  • To prepare, promulgate and interpret accounting and auditing standards for Islamic financial institutions
  • To review and amend accounting and auditing standards for Islamic financial institutions

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.

References[edit]

  1. ^ "Investopedia dot com". Retrieved 30 October 2013. 
  2. ^ "AAOIFI dot com". Retrieved 30 October 2013. 
  3. ^ Rifaat Ahmed Abdel Karim. "Accounting and Auditing Standards for Islamic Financial Institutions". p. 2. Retrieved 15 November 2013.