In partnership with Center of Research Excellence for Islamic Banking & Finance in King Fahad University of Petroleum and Minerals (KFUPM), Dhahran, Kingdom of Saudi Arabia, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held a specialized workshop to discuss accounting issues related to its prospective Shari’ah standard on Sukuk. The workshop was hosted by KFUPM on Wednesday and Thursday 25th and 26th of Muharram 1438 corresponding to 26th and 27th October 2016, where a group of accounting experts from regulatory and supervisory bodies, Islamic financial institutions, national accounting bodies and academics attended the workshop.
The workshop was opened by a speech delivered by His Excellency the University Vice Deputy Dean Dr. Sahel N. Abduljauwad, who expressed his appreciation to AAOIFI’s role and added that such collaboration between universities, research and academic centers, and the international professional organizations will have a significant impact on progress of learning and professional development and will contribute to economic development. He also welcomed the experts participating in the workshop who hailed from various parts of the world.
On the other hand, Dr. Hamed Merah, AAOIFI’s Secretary General, lauded, in his opening speech, the substantial global support and cooperation accorded to AAOIFI by the industry, including universities and the academia, as evidenced in the efforts of the Center of Research Excellence for Islamic Banking & Finance, King Fahd University of Petroleum and Minerals University which played host to this top-level workshop.
In this respect, Dr. Abdullah Al-Mansour, Director of Center of Research Excellence for Islamic Banking & Finance, stressed on the importance of the Islamic finance industry and the need to further develop this industry, as well as, the plans crafted by the center in cooperation with the School of Industrial Management at the University to support the development of research and practices in the area of Islamic finance, including the organization of this focused workshop on Sukuk to discuss relevant accounting issues.
This workshop is one of five specialized, technical workshops which are included in AAOIFI’s plan to re-issue its Shari’ah Standard No. (17) on Sukuk.
Previously, AAOIFI Shari’ah Board issued a resolution with respect to an extensive revision project on the Standard, towards developing a new comprehensive standard on Sukuk. The new standard will provide technical guidance on Shari’ah requirements as well as practical guidance on procedures for Sukuk issuances, covering the various stages from structuring to eventual issuance and listing of Sukuk on secondary markets. Development of the new standard will take into consideration the existing standards, laws and regulations, Fatwas as well as resolutions that have been issued by Shari’ah Supervisory Boards of leading Islamic financial institutions, in addition to prevailing market practices relating to Sukuk.
Sukuk are among the most important Islamic finance tools that have achieved significant growth and wide application – and are even considered to be a distinct sector, per se. The evolution of Sukuk sector, with emergence of a diverse array of Sukuk structures and types, has called on AAOIFI to reconsider its existing Shari’ah Standard on Sukuk that was issued around 12 years ago and had provided fundamental guidance to the international Islamic finance industry. The revision is also necessary to reflect changes in the areas of accounting, law and regulations, and such others, which relate to Sukuk.
Key discussion points are as follows: