Aaoifi PDF
Aaoifi PDF
Aaoifi PDF
ENTREPRENEURSHIP
RZB4213
BY:
KLC1160027
Significance of the establishment of AAOIFI
A not-for-profit organization that was established to maintain and promote Shariah standards for
Islamic financial institutions, participants and the overall industry. The Accounting and Auditing
Organization for Islamic Financial Institutions (AAOIFI) was created on February 26, 1990 to
ensure that participants conform to the regulations set out in Islamic finance.
The founding and associate members, as well as the regulatory and supervisory authorities of the
AAOIFI, define the acceptable standards for various functions. This includes areas such as
accounting, governance, ethics, transactions and investment.
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.
Stakeholder of AAOIFI
Associate members are those Islamic financial institutions and companies that comply with
Islamic Shari'a precepts and principles in their operations and transactions. In addition, Islamic
Fiqh academies and institutions that have corporate entities have their say in this class.
AAOIFI's membership base is not limited to founding and associate members. Members
representing regulatory and supervisory authorities - central banks, monetary agencies, and
suchlike- form a distinct category, playing vital role by supervising Islamic financial institutions
and their contribution towards the economy at large.
The last class of membership is observer members. Those members include organizations and
associations responsible for regulating the accounting and auditing profession and/or those
responsible for preparing accounting and auditing standards. Practicing certified accounting and
auditing firms that have interest in the accounting and auditing practices of Islamic financial
institutions are among observers as well. The list goes further by admitting financial institutions
engaged in financial activities of Islamic financial institutions (Islamic banking windows, for
instance). Users of financial statements of Islamic financial institutions- both individuals and
corporate- belong to the category, as well, and their observing role can't be underestimated.
There are more than 200 members in aaoifi , the Malaysian members in AAOIFI are:
Office Bearers
Accounting and Auditing Organisation of Islamic financial insinuation based on Bahrain and it
located at kingdom of Bahrain.
Headquarters: