Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) launch its AAOIFI Footprint Report 2020 at an event held today virtually.
President of Islamic Development Bank Group, H.E. Dr. Bandar M. H. Hajjar; H.E. Mr. Khalid Hamad Al-Hamad, Executive Director – Banking Supervision, Central Bank of Bahrain; and H.E. Dr. Ishrat Hussain, Advisor to the Prime Minister on Institutional Reforms and Austerity, Pakistan gave special addresses at the event which was supported by Jersey Finance. Secretary General, AAOIFI, Mr. Omar Mustafa Ansari presented the summary of the report to the event attendees.
H.E. Dr. Hajjar during the special address at the launch event said, “Specifically for the Islamic financial services industry, it is my immense pride to note that the Islamic Development Bank is the founding member and active supporter and contributor of all six Islamic finance infrastructure institutions (IIIs) which exist today for providing the best-practices standards for the global Islamic financial services industry.” H.E. further added, “The IsDB supports the adoption of AAOIFI and other IIIs standards in the various transactions and contracts of the Islamic financial services industry.”
The launch event also featured a panel discussion which examined the role of Islamic finance standard-setting bodies and the importance of adoption of their standards. The panelists included, His Eminence Mufti Muhammad Taqi Usmani, Chairman, AAOIFI Shari’ah Board; Dr. Bello Lawal Danbatta, Secretary General, IFSB; Mr. Firas Hamdan, Executive Director, Banque Du Liban and member of AAOIFI Accounting Board; and Mr. Faizal Bhana, Director, Middle East and Africa, Jersey Finance.
AAOIFI Footprint Report 2020 assesses the footprint of AAOIFI standards and captures the level of adoption of AAOIFI standards by various regulatory jurisdictions around the globe. As per the report findings respective AAOIFI standards (Shari’ah, accounting, auditing, governance and ethics) are adopted in not less than 27 countries and 40 regulatory jurisdictions within them, either fully or partially, as guidelines or reference material, on supplementary reporting basis, or base their local standards / regulations on AAOIFI standards.
The report also states that regulatory and supervisory authorities around the globe may be committed to adopting conventional international standards for two basic presumptions. Firstly, reporting and disclosure principles of conventional reporting standards do not conflict with Shari’ah. Secondly, financial reporting is a recording function that neither sanctifies nor nullifies the Shari’ah validity of a transaction. However, regulatory jurisdictions may still
adopt AAOIFI standards to provide guidance for their Islamic finance industry needs. AAOIFI’s standards development process entails continuous efforts to review, revise, and formally incorporate any updates, in line with the industry developments, market demands, and Shari’ah requirements.
On this occasion of the launch of the report, Chairman of AAOIFI Board of Trustees, H.E. Shaikh Ebrahim Bin Khalifa Al Khalifa, expressed satisfaction stated that “It gives me utmost pleasure to present this first ever AAOIFI Footprint Report. Only through the rigorous efforts of the team and an unparalleled support by the regulators and market players, as well as, the scholars, professionals and experts in the field of Islamic finance, it has been able to achieve a great feat in the development, growth, standardization and harmonization of Islamic finance in light of the divine guidance and the best industry practices. This study has been conducted to measure such impact that AAOIFI has made to the Islamic finance industry to a reasonable, measurable degree.
H.E. further stated that, ”Adoption and implementation of standards require years of advocacy, outreach, partnership, scholarship and capacity building, among others, AAOIFI is glad that in nearly three decades of its existence it has been successful in all these fronts.”
Mr. Faizal Bhana, Director, Middle East and Africa, Jersey Finance said, “We are very pleased to have been part of this prevalent discussion, with an excellent line-up of distinguished speakers, on the growing role of Islamic finance and its expansion across the globe. At Jersey, the world’s leading International Finance Centre, we take pride in our flexible and robust legal and regulatory regime that accommodates all types of investors, including Shariah-compliant investors who have been using our island for decades. Our robust legal infrastructure, including our laws and regulations, provide the flexibility to accommodate Shariah-compliant structures, thereby providing true legal equivalence for conventional and Shariah-compliant products as both are equally governed, regulated and administered on the same basis.” The report is downloadable BY CLICKING HERE. The report is in final stages of translation in Arabic, and will also be available for download shortly.