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AAOIFI's Certification Program:
AAOIFI Launches Contract Certification Program
Accounting and
Auditing Organization for Islamic Financial
Institutions (AAOIFI) has launched a major
initiative to streamline Shari’a compliance of
financial contracts for Islamic finance
transactions. AAOIFI Contract Certification
Program involves certifying that financial
contracts between Islamic financial institutions
and their clients comply to international
Shari’a standards.
Objectives of the program are to ensure
harmonization of Islamic finance practices, and
to enhance confidence in the Islamic financial
systems. For the Islamic financial
institutions, the certification program will
provide independent endorsement on Shari’a
compliance that can assist the institutions in
their marketing of Shari’a-compliant products to
their customers.
“The contract
certification program, which marks an important
milestone for the international Islamic finance
industry, will be overseen by AAOIFI’s Shari’a
Board and Accounting and Auditing Standards
Board. Our Shari’a Board comprises all the
eminent leading scholars and is acknowledged as
the foremost global authority on Shari’a for
international Islamic finance.” said Dr. Mohamed
Nedal Alchaar, the Secretary – General of
AAOIFI.
AAOIFI is the
international organization that formulates
standards for the international Islamic finance
industry. It has issued 68 standards on
accounting, auditing, ethics, governance, and
Shari’a. The standards have been made mandatory
in 9 jurisdictions and also followed as
guidelines in all the leading Islamic finance
centers across the world. Adoption of the
standards is being supported by professional
development programs that AAOIFI offers, such as
the Certified Shari’a Adviser and Auditor (CSAA)
and Certified Islamic Professional Accountant
(CIPA).
For the contract
certification program, AAOIFI will vet through
contracts that an Islamic financial institution
enters with its clients for the offering of
Islamic finance transactions, such as for
opening of deposit and investment accounts. The
certification process determines that such
contracts comply with all the relevant
stipulations of Shari’a principles and the rules
for Islamic finance. This program represents a
significant development for the progress of
international Islamic finance industry which has
witnessed strong growth over the recent years.
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