Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) successfully organized the inaugural regulators roundtable on 7 June 2021, virtually. The roundtable was organised to deliberate and discuss the feedback of regulatory and supervisory institutions on the exposure draft of AAOIFI Financial Accounting Standards (FAS) 1 “General Presentation and Disclosures in the Financial Statements of Islamic Banks and Financial Institutions”.
The roundtable was attended by more than 120 representatives from 40 regulatory and supervisory institutions from around the world.
The regulators keynote speech at the event was delivered by H.E. Dr. Wassim Manssouri, First Vice Governor, Banque du Liban, while the standard-setters keynote speech was delivered by Dr. Bello Lawal Danbatta, Secretary General, Islamic Financial Services Board (IFSB). Mr. Noor Abid, Member of AAOIFI Board of Trustees, chaired the overall event including the interactive roundtable discussions.
During his welcome remarks Mr. Abid highlighted the importance of this event and stated that “the exposure draft of FAS 1 reflects commitment of AAOIFI and its consistent endeavour for making financial statements of Islamic financial institutions transparent, consistent, fair, comparable and understandable. Our intention at AAOIFI has been to align ourselves with International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) as long as there is no conflict with Shari’ah. Additionally, if certain principles are covered well by the generally accepted principles, we are happy to adopt them and add what is necessary from Shari’ah point of view.”
H.E. Dr. Manssouri in his keynote remarks said that “AAOIFI standards serve as a guide to the Islamic finance industry’s growth and development and that Banque du Liban (Central Bank of Lebanon) supports all initiatives in this endeavour”. He further highlighted that “AAOIFI plays an important role in harmonizing and standardizing Islamic financial practices around the globe and called for more regulatory and supervisory bodies to adopt AAOIFI standards”. In the same sense, he highlighted “the important role of IFSB and their standards”. Dr. Manssouri stressed on “the positive impact of cooperation between regulators, AAOIFI, IFSB and other international organizations on Islamic finance”.
Dr. Danbatta affirmed that “this regulators roundtable is a landmark event for AAOIFI as a global standards-setting organization for Islamic finance industry”. He further said that “IFSB and AAOIFI have distinct and complementing mandates to develop the industry. Additionally, the two organizations are increasingly working together and have achieved significant progress in developing the joint standard on Shariah governance framework”.
Mr. Omar Mustafa Ansari, Secretary General, AAOIFI presented the AAOIFI Conceptual Framework for Financial Reporting and key differences with IFRS. He emphasized that the information needs of the users of financial statements of Islamic financial institutions are distinct and specific. Accordingly, the financial statements of such institutions must reflect the true nature and characteristics of the underlying transactions and that is possible only through AAOIFI FASs.
H.E. Shaikh Ebrahim bin Khalifa Al Khalifa, Chairman of AAOIFI Board of Trustees at this occasion stated, “AAOIFI is pleased to work with the regulatory and supervisory institutions in putting together this important regulators roundtable on FAS 1. We are thankful for their support and look forward to working with them in enhancing understanding of AAOIFI standards within their respective jurisdictions, including deeper collaboration, and conducting capacity development programs.”
List of institutions in attendance included: