The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held its 39^th meeting of its Governance and Ethics Board (AGEB / the board) recently in the Kingdom of Bahrain (in hybrid format).

The board agreed on the approach and content of the standard on Auditing and Assurance (SOAA) _“Auditing Requirements for Assessing Compliance with Shari’ah Principles and Rules” and directed the secretariat to proceed with its development process.

This AAOIFI SOAA intends to provide a comprehensive framework for an auditor for the performance of an audit of the financial statements of an institution that reports in line, and complies with, Shari’ah principles and rules. It provides principle-based guidance regarding the responsibilities of the auditor with regard to an audit, including those related to quality management, communication, planning and execution of the audit.

The board also reviewed the preliminary studies on “Digital Banking” and “Conversion of a Conventional Bank to an Islamic Bank”. After due deliberations, the board agreed on the overall approach and advised the secretariat to move forward with instructions to issue the exposure drafts by the first quarter of 2025.

Mr. Farrukh Raza, Chairman of AGEB, stated “We have long intended to initiate these projects and are pleased to move forward with their development processes.” He added “Our approach in the development of the auditing and assurance standards is to concentrate mainly on the specific aspects of auditing related to Shari’ah principles and rules and the specific business models and structures related to Islamic finance, while allowing the use of other established practices of auditing.”