Standards Development and Revision Processes · Adoption of AAOIFI Standards ; Newly Download Sharia'a Standards PDF Version ( downloads). AAOIFI – World Bank 11th Annual Conference “Islamic Finance in the post oil for support and sponsorship of Urdu translation of AAOIFI's Shariah Standards. AAOIFI's Shari'ah Standards are published both in Arabic and English. In case of any SABB. Exclusive Sponsor of AAOIFI's Shariah Standards Online Version.
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In addition, the AAOIFI has published an exposure draft of a Financial Accounting Standard “Risk Reserves” and invites opinion from the. limited to the issuance of the text of this Shari'ah Standard, and neither. AAOIFI nor ASB The technical and professional relationship between AAOIFI and the. PDF | A vigorous and vibrant equity market being an integral part of a Revisiting the AAOIFI Shariah Standards' Stock Screening Criteria.
Although AAOIFI was criticized a lot that the standards are no more than a manipulation of conventional standards but the fact is that the guidelines were made in line with the Shariah principles to avoid interest embedded reporting. The concept of Shariah governance, conducts in business and ethics were focused in these standards to assure the investors and other authorities that the Islamic finance is indeed differently practiced and is indeed a better solution than conventional finance.
Initially when the IFIs started their operations the disclosure and transparency in the financial reports were not observed and thus these institutions faced a lot of criticism in terms of their operations and performance.
Mentioned below is the analysis of only one standard of Zakah and the picture depicts that how many Islamic banks are following the AAOIFI standards till Since these bodies are playing their part in harmonizing the Islamic finance, other institutions must also perform in consonance with them to promulgate the idea of standardization among the Islamic finance industry. While the flexibility in fiqh opinion is presently contributing to global growth, it may soon become a constraining factor in the global growth of the industry if the challenges arising out of the use of diversity and flexibility in fiqh are not properly recognized and taken care of.
This is actually the place where shariah standard setting bodies must perform their role in indulging and diversifying the Islamic financial services industry and should come up with the diversity in the Fiqh ruling to compete with the international standard setting bodies and make their impression in the arena of market players.
The AAOIFI and IFSB needs to be more efficient globally as well as their significance must be incumbent with the idea that the standardized procedures and guidelines must be in consonance with the shariah and business requirements. Despite concern from regulators and supervisors, the Islamic banking industry can still survive and grow in the market of believers, which no doubt is a big market and may not pose any limit to the growth of the industry in the foreseeable future.
The industry is currently not transparent enough on details of Shariah application. AAOIFI and IFSB are performing their roles and they kept emphasizing on the transparency in the financial reporting of the financial institution to gain more trust and social capital from the investors. Shariah scholars who understand and disagree with some declared applications chose to remain silent as an expression of respect for other Shariah opinions but it is not the shariah scholars who needs to enforce compliance of these standards rather, the Regulators must govern and imply conditions to the financial institutions for the implementation of the standards.
The industry, thus, is likely to be thriving on the Shariah illiteracy of its clientele. As Shariah literacy in the clientele of industry increases, and Shariah scholars with different opinions become vocal, the industry may find its growth severely constrained.
A comparison of MASB and AAOFI accounting conceptual frameworks
Until the Islamic finance sector can satisfy regulators that they are amenable to the same standards as applied to the conventional financial industry, Islamic finance will remain at the margins of the financial system. The emphasis has to be on the development of diversified and comprehensive Shariah-compliant financial solutions to meet the differentiated needs of various businesses, including the requirements of international businesses, and thus facilitate cross-border investments.
As Islamic banking continues its steady progress into the mainstream financial system and becomes more integrated with the global financial system, one of the most challenging hurdles the industry must overcome is to continue on its successful growth path and overcome fragmented regulation.
The issue has been raised on many international forums on the need of harmonizing the Islamic financial transactions, its accounting treatment, its methodology and the countries should apply them with respect to their legal and regulatory framework.
With the emergence of Islamic financial institutions such as Islamic banks, Islamic investment companies, Islamic insurance companies, and other Islamic financial institutions, and in the absence of any single authority to guide and supervise them in Shariah matters, the need arose for these institutions to have their own Shariah boards and councils to guide and supervise their activities to conform to Shariah and give Shariah clearance on their transactions and contracts.
Shariah standard setting bodies are essential requirement of Islamic financial services industry and their role and significance is undeniable.
Since the Islamic finance industry is growing there must be a substantial need for these bodies to come into action and harmonize the industry to expedite the growth process through standardizing the IFIs. Islamic Accounting. Global standards urged to boost Islamic finance.
International standard setting. Khan, M.
Thunderbird International Business Review, Nadzri, A. Roles and impacts of accounting and auditing organization for Islamic financial institutions AAOIFI in dealing with the accounting and disclosure of Zakah and interest Riba. Learn how to update your browser.
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The Standard will, for the first time, set specific rules for the use of gold as an investment in the Islamic finance industry. Until now, there have been no such rules. Hopefully, this would represent a progressive stride for the Islamic finance industry.
The Standard will help open up a new investment asset class, enabling Islamic banks and other financial institutions to grow their customer bases and facilitate the creation of a broader range of saving, hedging and diversification products. Gold is a proven wealth preservation asset that Islamic investors can now deploy to protect their wealth and diversify market risks. Discussions on the Standard no.
Role of Bangladesh Central Bank.
While the flexibility in fiqh opinion is presently contributing to global growth, it may soon become a constraining factor in the global growth of the industry if the challenges arising out of the use of diversity and flexibility in fiqh are not properly recognized and taken care of.
Uses of Musharakah and Mudarabah.
Sukuk al-Istisna. Putting Ideas to Practice.