Shariah governance

AAOIFI (Islamic finance standard setter)

The Bahrain-based not-for-profit body that issues Shari'ah, accounting, auditing, governance and ethics standards for Islamic finance.

AAOIFI, the Accounting and Auditing Organization for Islamic Financial Institutions, is an international not-for-profit standard setter based in Bahrain. It issues Shari'ah standards, financial accounting standards, auditing and governance standards and codes of ethics for Islamic financial institutions, through a due process run by its technical boards, including its Shari'ah Board. Its standards apply only where a regulator adopts them or an institution chooses to follow them, and AAOIFI's own adoption page lists jurisdictions that use them fully, partially or as guidance. Its certificates, listed under capacity building, are professional qualifications for individuals rather than approvals of products.

Sources

AAOIFI, About AAOIFI

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

Related terms

AAOIFI Financial Accounting Standards (FAS)The accounting standards AAOIFI issues for Islamic financial institutions, covering contract types and Islamic-specific reporting.IFSB (Islamic Financial Services Board)The international standard setter that issues prudential standards and guiding principles for Islamic banking, capital markets and takaful.Shariah supervisory boardAn independent panel of Shariah scholars that approves an institution's products and oversees its Shariah compliance.Central Shariah boardA national or regulator-level Shariah authority whose rulings set or harmonise Shariah positions across a jurisdiction.FatwaA juristic opinion on a Shariah question; in finance, usually a Shariah board's ruling on a product or transaction.