Accounting, Auditing and Governance Standards Accounting, Auditing and Governance Standards This publication contains 26 accounting standards, 5 auditing standards, 2 codes of ethics and 7 governance standards that AAOIFI has issued for the international Islamic finance industry. Consequently, the standards have introduced greater harmonization of Islamic finance practices in all major Islamic finance markets throughout the world. From our standards development and revision program over the past year, we have issued, amongst others, a new accounting standard on investment account and a revised accounting standard on consolidation. These standards are included in this latest publication of Accounting, Auditing and Governance Standards. The new accounting standard on investment accounts — Financial Accounting Standard No. Pertinent points that have been incorporated in the new FAS 27 included updated guidance on accounting treatment for on-balance sheet and off-balance sheet investment accounts.
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In addition, over this period, International Accounting Standards IAS or respective national accounting standards were followed by Islamic banks. Hence, the unique requirements of Islamic financial institutions were not being met. To give two examples: Fiduciary risk: the Mudaraba contract places liability of the loss on the mudarib. In an industry that is often quite fragmented, it is hoped that the development of AAOIFI standards will go a long way in promoting convergence in Sharia standards and leading to further growth in this nascent market.
Concept of financial accounting for IFIs. Murabaha and Murabaha to the purchase orderer. Mudaraba financing. Equity of investment account holders and their equivalent. Salam and Parallel Salam. Ijarah and Ijarah Muntahia Bittamleek. Provisions and Reserves. Investment Funds. Provisions and Reserves in Islamic Insurance Companies.
Foreign Currency Transactions and Foreign Operation. Contributions in Islamic Insurance Companies. Deferred Payment Sale. Disclosure on Transfer of Assets. Segment Reporting.
Accounting, Auditing and Governance Standards
Then, it was registered on 27 March in Bahrain. It has members from more than 45 countries  , 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 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. 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. Retrieved 12 March
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)