AAOIFI And IASB Achieve Higher Levels Of Cooperation

Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held a meeting with the International Accounting Standards Board (IASB) on 16 December 2014 at the latter’s office in London, United Kingdom to discuss potential areas of cooperation.

During the meeting, AAOIFI formally accepted the invitation from IASB, the body that develops International Financial Reporting Standards (IFRS), to participate in its newly formed Consultative Group on Shari’a-Compliant Instruments and Transactions. AAOIFI has also offered to arrange the next meeting of the Consultative Group in the first quarter of 2015 in the Arabian Gulf region. The IASB welcomed and accepted this offer. Both AAOIFI and IASB discussed possibility of further strengthening the relationship between the organisations especially in order to support financial reporting requirement of the international Islamic finance industry.

AAOIFI was represented at the meeting by Mr. Noor Abid, Member of Board of Trustees, Dr. Hamed Hassan Merah, Secretary General, and Mr. Khairul Nizam, Deputy Secretary General, while IASB by Mr. Ian Mackintosh, Vice Chair, and Mr. Hugh Shields, Executive Technical Director. Mr. Ian Mackintosh is also the Chair of the Consultative Group.

Commenting on the development, Dr. Merah said “we hope that by joining the Consultative Group, AAOIFI with its institutional expertise and technical understanding on Shari’a and accounting matters for Islamic finance can substantially benefit the Consultative Group, especially in view of AAOIFI’s 25-year experience pertaining to Islamic financial products and transactions, from Shari’a, accounting, and technical perspectives. This is in addition to AAOIFI’s global credibility, and its close relationships with Islamic financial institutions around the world, and the support it receives from these institutions”.

He added that AAOIFI’s participation in the Consultative Group would also support AAOIFI’s commitment towards ensuring transparency in operations and financial reporting of the international Islamic finance industry. It also represents a further step towards more cooperation and coordination with the IASB in the best interest of the Islamic financial industry”.

AAOIFI, established in 1991 and based in Bahrain, is the leading international not-for-profit organisation primarily responsible for development and issuance of standards for the global Islamic finance industry. It has issued a total of 88 standards in the areas of Shari’a, accounting, auditing, ethics and governance for international Islamic finance. It is supported by over 200 institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from over 45 countries. Its standards are currently followed by all the leading Islamic financial institutions across the world and have introduced a progressive degree of harmonisation of international Islamic finance practices.

Originally published on www.gulfbase.com