Submitted By: Saadia
1. Accounting and Auditing Organization for Islamic financial institution (AAOIFI)
The AAOIFI is a non-profit organization that focuses mainly on the area of accounting and auditing for Islamic financial institutions. While recognizing the need for standards, AAOIFI was established on February 1990 in Algeria and was registered on March 1991 in the kingdom of Bahrain. The organization is supported by 200 institution members from 45 countries across the global. The AAOIFI is one of prominent Islamic agency that attempts to install accounting and auditing standard for Islamic financial industry. The main object is to develop and disseminate accounting and ...view middle of the document...
2. Islamic Financial Services Board (IFSB)
The Islamic Financial Services Board is an international body based in Kuala Lumpur, Malaysia, and it began its operations in March 2003. The institution is working as international standard setting body of regulatory and supervisory agencies that have their main interest in ensuring the effective performance and stability of the Islamic financial services industry covering the area of banking, capital market, and insurance. The members of IFSB include 49 regulatory and Supervisory authorities in addition to Islamic Development Bank, Asian Development Bank, Islamic Corporation for the Development of Private Sectors, the International Monetary Fund, World Bank, and Bank for International Settlements, and 138 market players and professional firms operating in 39 countries across the world.56 The primary target of IFSB is to develop uniform regulatory and transparency standards to address characteristics specific to Islamic financial institutions, keeping in mind the national financial environment, international standards, core principles, and good practices. The IFSB has also been enhancing awareness of issues that are pertinent to or have an impact on the regulation and supervision of the Islamic financial services industry.57 In short, the performance of IFSB is divided into three main areas:
1) Regulatory perspective : It, effort to promote the development of a prudent and transparent Islamic financial services industry through introducing new, or adapting existing, international standards consistent with Islamic principles. It also provides guidance on the effective supervision and regulation of institutions offering Islamic financial products; by developing Islamic criteria for identifying, measuring, managing, and disclosing risks, taking into account international standards for valuation, income, and expense calculation and disclosure.
2) Coordination and harmonization perspective: To harmonize Islamic financial service industry, IFSB cooperates with other relevant agencies, those who are working to setup standards for stability and the soundness of the international monetary and financial systems such as Islamic Development Bank, Asian Development Bank, Islamic Corporation for the Development of Private Sectors, the International Monetary Fund, World Bank, and Bank for International Settlements. It also gives initiative support to enhance cooperation among member countries relevant to Islamic financial instrument development, better operation and risk management efficiency.
3) Training and research perspective: In order to support further development of Islamic financial service industry, the IFSB also provides training programme and facilitates personal development in areas that relevant to better effective regulation of Islamic financial service industry and related markets. It is also undertaking research and surveys on the industry and creating a database of Islamic bank,...