The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held the first meeting of its newly formed Accounting Board (AAB) on 29th and 30th March 2020 via video conference.
Mr. Omar Mustafa Ansari, Secretary General (SG), AAOIFI, opened the meeting and welcomed all the appointed members. He highly appreciated the performance of the board in its previous term and briefed the new board on the completed and near-completion projects during that term. He also thanked the newly appointed members for having taken up the AAB’s membership despite their eventful work agendas and engagements and wished them a hprosperous term of office. Furthermore, He extended thanks to their respective institutions for nominating them and allowing their valuable time to be shared with AAOIFI for its broader mission. He reminded them that the Islamic finance industry has high expectations on this technical board which includes a number of distinguished experts and professionals from various professional and disciplinary backgrounds. The formation of AAB has taken into consideration proper representation of different sectors within the Islamic finance industry and of experts serving and supervising the industry, as well as, the disciplinary backgrounds and work expertise of the members in addition to geographical / regional represenation. AAB has been formed with membership of 15 experts in the areas of accounting, auditing and regulatory / supervisory work from different parts of the world.
The meeting commenced its agenda with the appointment of the chairman and deputy chairman of the AAB. Mr. Hamad Al. Oqab was reappointed unopposed as Chairman of AAB for the new term 2020-24, and Mr. Syed Najmul Hussain was appointed, after discussion, as Deputy Chairman of AAB for the new term 2020-24. Mr. Hamad Al. Oqab on his reappointment commented that he appreciated the trust and confidence placed on him with his re-appointment as Chairman of this board. He congratulated the newly appointed Deputy Chairman, Mr. Syed Najmul Hussain on his appointment. The members appreciated the efforts made by AAOIFI and for the recent formation of the AAB with membership of distinguished experts from around the globe.
An important and timely agenda item was the AAB response, at its own level, to coronavirus (COVID19) outbreak and the disruption it has caused on a global scale. The members discussed the significant volatility currently gripping financial markets worldwide and concluded that the Islamic finance industry was not immune to any negative consquences. The members agreed that AAOIFI as a standard-setting body and AAB as the accounting body must be proactive in response to market developments in the aftermath of the outbreak. This resulted in the formation of a COVID 19 task force/committee consisting of members and representatives of the Board from various jurisdictions. The task force/committee mandate would be to monitor and provide guidance on the accounting impact on response for COVD19.
The agenda of the meeting also tackled the board’s new strategy and 4-year plan. The members discussed this matter at length to ensure inclusion of all areas of development, dissemination and adoption of AAOIFI financial accounting standards and pronouncments. The new plan included the initiation of a number of new projects already identified in the FAS review and revision project which commenced in 2018. The members also reviewed the existing projects in the pipeline and approved the overall work plan in addition to the year 2020 plan. The board also diculssed and approved the formation of a number of working groups from amongst board members to carry out and supervise the development process for these projects, in addition – in addition to external experts-. Additionally, the memebrs discussed at length and approved the formation of a number of techincal committees, namely, the professional auditing standards committee, the technical advisory and interpretations committee and the FAS (English-Arabic) translation committee were selected.
Finally, the board discussed the changes to financial accounting standard 36 on “Wa’ad, Khiyar and Tahawwut” in view of the comments made by AAOIFI’s Shari’ah Board Committee and the last meeting held by the respective working group, as well as the written comments submitted to AAOIFI at the public hearing stage, and accordinly adopted the final standard.
The next AAB meeting is scheduled to be held in June 2020 in Manama, Kingdom of Bahrain.