About AAOIFI Final

About AAOIFI. Accounting and Auditing Organization for Islamic Financial Institutions

Abbreviation AAOIFI

Motto Developing Islamic accounting and auditing thoughts

Formation February 26, 1990; 24 years ago

Founders Islamic Development HYPERLINK

"http://en.wikipedia.org/wiki/Islamic_Development_Bank

"Bank,Dallah HYPERLINK "http://en.wikipedia.org/wiki/Dallah_Al-

Baraka" Al-Baraka, Faysal Group (Dar Al HYPERLINK

"http://en.wikipedia.org/wiki/Dar_Al_Maal_Al_Islami"Maal

HYPERLINK "http://en.wikipedia.org/wiki/Dar_Al_Maal_Al_Islami" Al

HYPERLINK

"http://en.wikipedia.org/wiki/Dar_Al_Maal_Al_Islami"Islami), Al Rajhi

Banking & Investment Corporation, Kuwait Finance House and Al-

Bukhary Foundation

Type Independent international not-for-profit organization

Purpose Standardization and harmonization of internationalIslamic

HYPERLINK "http://en.wikipedia.org/wiki/Islamic_finance"

finance practices and financial reporting in accordance to Sharia

Headquarters Manama, Bahrain

Location Yateem Center, Block: 304,Al-Muthana road

Region served

Worldwide

Official language

English, Arabic

Main organ General Assembly

Website www.aaoifi.com

Incorporation.AAOIFI was established in accordance with the Agreement of Association which was signed by

Islamic financial institutions on 26 February 1990 in Algiers. Then, it was registered on 27 March

1991 in Bahrain.cAs an independent international organization, enjoys the support of a large number

of institutions with such legal persons around the world (200 members from more than 45 countries,

so far), including central banks and Islamic financial institutions and other parties working in the

financial industry and banking, Islamic International. The Commission has obtained great support for

the application of the standards issued by it, where these standards are dependent today in the

Kingdom of Bahrain and the Dubai International Financial Centre, Jordan, Lebanon, Qatar, Sudan

and Syria . The competent authorities in Australia, Indonesia, Malaysia, Pakistan, Saudi Arabia and

South Africa issued guidelines derived from the standards and publications.

OUR HISTORY.

AAOIFI was established in accordance with the Agreement of Association which was signed by Islamic financial institutions on 1 Safar, 1410H corresponding to 26 February, 1990 in Algiers. Then, it was registered on 11 Ramadan 1411 corresponding to 27 March, 1991 in the State of Bahrain.

Objectives of AAOIFI.

The objectives of AAOIFI are:

• To develop accounting and auditing thoughts relevant to Islamic financial institutions

• To disseminate accounting and auditing thoughts relevant to Islamic financial institutions and its

applications through training, seminars, publication of periodical newsletters, carrying out and

commissioning of research and other means

• To prepare, promulgate and interpret accounting and auditing standards for Islamic financial

institutions

• To review and amend accounting and auditing standards for Islamic financial institutions

AAOIFI carries out these objectives in accordance with the precepts of Islamic Shari’a which

represents a comprehensive system for all aspects of life, in conformity with the environment in

which Islamic financial institutions have developed. This activity is intended both to enhance the

confidence of users of the financial statements of Islamic financial institutions in the information that

is produced about these institutions, and to encourage these users to invest or deposit their funds in

Islamic financial institutions and to use their services.

To develop accounting and auditing thoughts relevant to Islamic financial institutions;

To disseminate accounting and auditing thoughts relevant to Islamic financial institutions and its applications through training, seminars, publication of periodical newsletters, carrying out and commissioning of research and other means.To prepare, promulgate and interpret accounting and auditing standards for Islamic financial institutions. And To review and amend accounting and auditing standards for Islamic financial institutions.

AAOIFI carries out these objectives in accordance with the precepts of Islamic Shari’a which represents a comprehensive system for all aspects of life, in conformity with the environment in which Islamic financial institutions have developed. This activity is intended both to enhance the confidence of users of the financial statements of Islamic financial institutions in the information that is produced about these institutions, and to encourage these users to invest or deposit their funds in Islamic financial institutions and to use their services.

OUR MISSION.

Standardization and harmonization of international Islamic finance practices and financial reporting in accordance to sharia.

Organizational Structure.The organizational structure of AAOIFI includes a general assembly. AAOIFI also has a board of

trustees and an accounting and auditing standards board each consisting of fifteen part-time

members, a Shari‘ah committee consisting of four part-time members, an executive committee, and

a secretary-general who is a full-time executive and heads the general secretariat.

GENERAL ASSEMBLY.

Composition of the General Assembly

The General Assembly is composed of all founding, associate, supporting and observing members and regulatory and supervisory authorities Observer and supporting members have the right to participate in the meetings of the General Assembly but without a right to vote. The General Assembly is the supreme authority and convenes at least once a year.

.

Conditions for Membership.

A member shall be from amongst the categories of organizations listed in Article 3 of this Statute.A member shall pay the prescribed membership fee and the annual subscription fee subject to paragraph to the Statute.

A member shall comply with AAOIFI's Statute and by-laws.

A member shall satisfy any other conditions that may be laid down by the Board of Trustees.

Powers of the General Assembly.

Approval of the amendments of the Statute of AAOIFI.

Approval of applications for admission of new members of the General Assembly.

Appointment of the members of the Board of Trustees.

Approval of the Board of Trustees’ report, AAOIFI's financial statements and external auditor's report.

Approval of the appointment of the external auditor and fixing his fees.

Subject to the provision of the Statute, the General Assembly shall determine the basis for reimbursing members of the Board of Trustees for costs incurred by them in the course of discharging their duties as members of the Board of Trustees.

General Assembly Meeting.

The General Assembly shall convene at least once a year at the invitation of the Chairman of the Board of Trustees, or at the request of 25% of the members who have the right to vote. Such request shall be submitted to the Chairman. The General Assembly shall elect, from among its founding members, a Chairman for its meeting for a period of one year.

The quorum necessary for convening a valid meeting of the General Assembly shall be the presence or proxy of at least 51% of the members who have the right to vote and who have paid their subscriptions.

Each founding member, associate member and members representing regulatory and supervisory authorities shall have a number of votes for each membership fee or the multiple thereof but shall not exceed twenty votes. Resolutions in respect of all items on the agenda shall be adopted by the absolute majority of the votes of the members in person, or by proxy except for resolutions for amending AAOIFI's Statute which shall be adopted by a majority of two-thirds of the votes of the members in person or by proxy.

Any member may give a written proxy to another member to attend and vote on his behalf.

Where no quorum is available, the General Assembly shall be called for another meeting to be convened within not more than three months. This other meeting shall be valid by the presence or proxy of at least 25% of the members who have the right as vote and who have paid their subscriptions.

FOUNDERS

The founding members are the Islamic financial institutions that are signatories to the Agreement establishing AAOIFI in 1989, and those that have been subsequently accepted as founding members. These are:

The Islamic Development Bank

1.Dallah Al Baraka

2.Faysal Group (Dar Al Maal Al Islami)

3,Al Rajhi Banking & Investment Corporation

4.Kuwait Finance House

5.Albukhary Foundation

BOARD OF TRUSTEES.

OVERVIEW.

The Board of Trustees shall be composed of twenty part-time members to be appointed by the General Assembly every five years and they shall continue in office until members of the succeeding Board are appointed. The members of the Board of Trustees shall be elected from among the following categories, taking into account their geographical distribution:

• Regulatory and supervisory authorities (central banks, monetary authorities, etc).

• Islamic financial institutions

• Accounting and auditing firms whose professional work relates to Islamic financial institutions.

• Shari'a Fiqh scholars

• Users of financial statements of Islamic financial institutions.

The conditions of electing these members are specified in Article 12 of AAOIFI Statute. They are that a member shall be appointed to fill a vacant office by a majority of the votes of the General Assembly, and shall belong to the same category of the member whose office has become vacant, and the term of office of a member appointed to fill a vacancy shall terminate upon the expiry of the original term of the member whose office had become vacant. The Board of Trustees meets at least once a year. With the

exception of the proposals to amend the statute of AAOIFI which requires the vote of three quarters of the members of the Board of Trustees, decisions in all matters before the Board are adopted by the majority of the members voting. In case of a tie, the Chairman shall have the casting vote. The powers of the Board of Trustees include, among others, the following:

• Appointment of members of AAOIFI's Boards and termination of their membership, in accordance with the provisions of the statute

• Arrangement of sources of finance for AAOIFI and investing those resources

• Appointment of two members from amongst the members of the Board of Trustees to the Executive Committee

• Appointment of the Secretary-General

Notwithstanding the provisions of the statute concerning the Board of Trustees' powers and authorities, neither the Board of Trustees nor any of its sub-committees including the Executive Committee, has the right to interfere directly or indirectly in the work of the other Boards of AAOIFI or influence them in any manner

TRUSTEES COMMITTEES.

Sub-Committees.

The Board of Trustees may form sub-committees from among its members or from others and shall determine their terms of reference, powers and the manner in which they shall conduct their business as well as the determination of their remuneration.

1.Executive Commitee

1.Composition of the Executive Committee.

The Executive Committee shall be composed of up to six members as follows:

1. The Chairman of the Board of Trustees or, in his absence, the Deputy Chairman as Chairman of the Committee.

2. The Secretary General of the Organization as member and rapporteur.

3. Up to two members to be appointed by the Board of Trustees from among its members.

4. Chairman of the Accounting and Auditing Standards Board and the Chairman of the Shari'a Board or their deputies.

Powers of the Executive Committee.

The Executive Committee shall have the following powers:

1. To discuss the work plan and the annual budget of AAOIFI and submit them to the Board of Trustees for approval.

2. To discuss AAOIFI's annual report prepared by the General Secretariat to the Board of Trustees, financial statements and the report of the external auditor and submit them to the Board of Trustees for review before they are approved by the General Assembly.

3. Approval of the review and determination of the Secretary General's salary increases and bonus.

4. Undertaking any other functions assigned by the Board of Trustees.

5. The Executive Committee may delegate any of its powers to its Chairman.

Meetings of the Executive Committee.

The Executive Committee shall meet at least once a year at the request of the Secretary General, or as and when required at the request of either its Chairman or the Secretary General.The presence or proxy of the majority of the members will be necessary to convene the meeting, provided that the Chairman of the Board of Trustees, or the Vice Chairman in case of the Chairman's absence, is present at the meeting. The resolutions of the Committee shall be passed by the majority of the votes of the members in person or by proxy. In case of a tie, the Chairman of the Committee shall have the casting vote.

BOARD OF TRUSTEES.

•

H.E Shaikh Ebrahim Bin Khalifa Al Khalifa

Minister of Housing - Kingdom of Bahrain, Chairman

•

Dr Ahmed Bin Abdulla Al-Moghames

Secretary General, Saudi Organisation for Certified Public, Accountants (SOCPA), Riyadh, KSA, Member

•

Mr. Farid Mansour

Former Chairman,Mansour & Co. PricewaterhouseCoopers, Cairo, Egypt, Member

•

Mr. Ahmed Fayez Al Shamsi

Chief Financial Officer, Emirates Islamic Bank, UAE, Member

•

Mr Abdulrazzak Mohammed Elkhraijy

Head of Islamic Banking Development Group, National Commercial Bank, Jeddah, KSA, Member

•

Mr.Osman Elhadi Ibrahem

Managing Director, Shiekan Insurance & Reinsurance CO. LTD, Khartoum, Sudan, Menber

•

Mr. Irfan Siddiqui

President & Chief Executive Oficer, Meezan Bank Ltd, Karachi, Pakistan, Member

•

Sheikh Adnan Al Qattan

Deputy Chairman of Board of Trustees, Royal Charity Foundation, Kingdom of Bahrain, Member

•

Professor Sheikh Dr. Mohamed Saeed Ramadan Al Booti

Professor, Shari’a College, University of Damascus, Syria

H. E. Mohammed Ali Bin Zayed Al Falasi

Deputy Governor, Central Bank of United Arab Emirates, Abu Dhabi, UAE, Member

•

H. E. Sayed Salim Raza

Governor, Stat Bank of Pakistan, Karachi, Pakistan, Member

•

H. E. Tan Sri Syed Mokhtar Al Bukhary

Founder, Al-Bukhary Foundation, Malaysia, Member

•

H. E. Mr. Mohamed Sulaiman Al Omar

Chief Executive, Kuwait Finance House, Kuwait, Member

•

H. E. Shaikh Abdullah Sulaiman Al Rajhi

Chief Executive Officer, Al Rajhi Bank, KSA, Member

•

H. E. Shaikh Saleh Abdullah Kamel

President, Dallah Al Baraka Group, Jeddah, KSA, Member

•

Dr. Khaled Al-Fakih

AAOIFI’s Secretary General & CEO, Member/Rapparteur

SHARIA STANDARDS BOARD.

OVERVIEW.

The Shari’a Board is composed of not more than twenty members to be appointed by the Board of Trustees for a four-year term from among fiqh scholars who represent Shari’a supervisory boards in the Islamic financial institutions that are members of AAOIFI, and Shari’a supervisory boards in central banks.

The powers of the Shari’a Board include, among others, the following:

(1) Achieving harmonization and convergence in the concepts and application among the Shari’a supervisory boards of Islamic financial institutions to avoid contradiction or inconsistency between the fatwas and applications by these institutions, thereby providing a pro-active role for the Shari’a supervisory boards of Islamic financial institutions and central banks.

(2) Helping in the development of Shari’a approved instruments, thereby enabling Islamic financial institutions to cope with the developments taking place in instruments and formulas in fields of finance, investment and other banking services.

(3) Examining any inquiries referred to the Shari’a Board from Islamic financial institutions or from their Shari’a supervisory boards, either to give the Shari’a opinion in matters requiring collective Ijtihad (reasoning), or to settle divergent points of view, or to act as an arbitrator.

(4) Reviewing the standards which AAOIFI issues in accounting, auditing and code of ethics and related statements throughout the various stages of the due process, to ensure that these issues are in compliance with the rules and principles of Islamic Shari’a.

SHARI'A STANDARDS COMMITTEE (2)

NAME POSITION STATUS

Sheikh Dr. Ajeel Jasim Al-Nashmi Member, Shari’a Supervisory Board, Kuwait Finance House, Kuwait

Chairman

Sheikh Dr. Esam 'Anezi Member, Shari'a Supervisory Board, Investment Dar, Kuwait

Member

Shaikh Mohammed Younis Al Beiraqdar

Al Imtiaz Investment, Kuwait. Member

Mohammed Oud Alfozie Head, Shari’a Section, Al Imtiaz Investment, Kuwait

Member

Dr .Ali Al-Rashed Economic Legel Consultant – Al Rayah Int’l. Consulting & Training, Kuwait

Member

Mohammed Anas Al-Zarka International Investor Company, Kuwait Member

Sheikh Abdulsattar Al- Kattan Manager – Sharia Control & Legal Affairs – A’ayan Leasing &Investment Co, Kuwait

SHARI'A STANDARDS COMMITTEE (3)


Sheikh Dr. Ali MohiEldinne Alqora daghi

Head of Islamic Jurisprudence Department, Qatar University, Qatar

Chairman

Sheikh Dr. Ajeel Jasim Al-Nashmi Member, Shari’a Supervisory Board, Kuwait Finance House, Kuwait

Member

Sheikh Dr. Abdul Sattar Abu Ghuddah

Shari’a Consultant, Dallah Al Baraka Group, Saudi Arabia

Member

Sheikh Dr. Ahmad Ali Abdulla Secretary General, The Higher Council of the Shari’a Supervisory Board, Sudan

Member

Sheikh Dr. Mohamed Ali Al Qari Member, Shari'a Supervisory Board, Bank Al Jazira, Saudi Arabia

Member

Shaikh Dr. Saleh Abdullah Al Lihaidan

General Manager, Shari’a Group, Al Rajhi Bank, Saudi Arabia

Member

Dr. Khaled Al-Fakih Secretary-General & CEO, Accounting and Auditing Organization for Islamic Financial Institutions, Kingdom of Bahrain

Member

Sheikh Dr. Ayashi Faddad Shari’a Advisor, Islamic Development Bank, Saudia Arabia

SSB BY LAWS.

Shari'a Standards By laws.

Composition of the Shari'a Board

The Shari'a Board shall be composed of up to twenty one members to be appointed by the Board of Trustees for a four-year term from among Fiqh scholars including those who represent Shari'

supervisory boards in the Islamic financial institutions that are members of AAOIFI and Shari'a supervisory boards in regulatory and supervisory authorities, and including the Secretary General. The Shari'a Board shall make use of experts in different specialization.

Appointment of Members to Fill Vacancies on the Shari'a Board

Provision of Article 28 shall apply to the members of the Shari'a Board.

Reappointment of Members of the Shari'a Board


Appointment of the Chairman and Deputy Chairman of the Shari'a Board

Provision of Article 30 shall apply to the Shari'a Board.

Membership Rules for the Shari'a Board


Termination of Membership of the Shari'a Board


Powers and Duties of the Chairman of the Shari'a Board


Meetings of the Shari'a Board


Sub-Committees


ACCOUNTING & AUDITING STANDARDS BOARD ( AASB).

OVERVIEW.

The Standards Board is composed of twenty part-time members who are appointed by the Board of Trustees for a five-year term. Members of the Standards Board represent the following various categories: regulatory and supervisory bodies, Islamic financial institutions, Shari'a supervisory boards, university professors, organizations and associations responsible for regulating the accounting profession and/ or responsible for preparing accounting and auditing standards, certified accountants, and users of the financial statements of Islamic financial institutions.

The powers of the Standards Board include, among others, the following:

(1) To prepare, adopt and interpret accounting and auditing statements, standards and guidelines for Islamic financial institutions.

(2) To prepare and adopt code of ethics and educational standards related to the activities of Islamic financial institutions.

(3) To review with the aim of making additions, deletions or amendments to any accounting and auditing statements, standards and guidelines.

(4) To prepare and adopt the due process for the preparation of standards, as well as regulations and by-laws of the Standards Board

The Standards Board meets at least twice every year and its resolutions are adopted by the majority of the votes of the members voting. In case of a tie, the chairman of the Standards Board shall have the casting vote.

ACCOUNTING STANDARDS COMMITTEE.


Mr. Jalil Al-Aali Partner, KPMG Fakhro, Bahrain Chairman

Dr. Nordin Mohd Zain / Mr. Aly El Azhary

Partner, Deloitte, Malaysia / Audit Senior Director, Deloitte, Saudi Arabia

Member

Mr. Firas S Hamdan Head of Studies & Analysis Division, Accounting Department, Banque du Liban (Central Bank of Lebanon), Lebanon

Member

H. E. Mr. Mohamed Sulaiman Al Omar

Chief Executive, Kuwait Finance House, Kuwait

Member

Mr. Issam Z Al-Tawari Vice Chairman & Chief Executive Officer,

Rasameel Structured Finance Co., Kuwait

AASB MEETINGS.

The Accounting and Auditing Standards Board shall convene at least twice a year on the invitation of its Chairman or at the request of 25% of its members submitted to the Chairman. The Accounting and Auditing Standards Board's meetings shall be deemed valid if the majority of its members are present in person or by proxy. The Accounting and Auditing Standards Board's resolutions shall be adopted by the majority of the votes of the members present in person or by proxy. In case of a tie, the Chairman of the Board shall have the casting vote.

Invitations for the meeting of the Accounting and Auditing Standards Board shall be sent together with the agenda at least one month before the date of the meeting.

AASB BY LAWS.

Appointment of Members to Fill Vacancies on the Accounting and Auditing Standards Board

In the event that the term of office of a member of the Accounting and Auditing Standards Board expires for reason of death, resignation, disability or removal from office, the Board of Trustees shall appoint a successor to fill the vacancy(s) subject to the following:

1 A member shall be appointed to fill a vacant office by a majority of votes of members of the Board of Trustees, and shall belong to the same category of the member whose office had been vacated.

2 The term of office of a member appointed to fill a vacancy shall terminate upon the expiry of the original term of the member whose office had become vacant.

ACCOUNTING & AUDITING STANDARDS BOARD ( AASB)

The Standards Board is composed of twenty part-time members who are appointed by the Board of Trustees for a five-year term.

•

Mr. Muhammad Said Abdelwahab

Position: Assistant General Manager, Kuwait Finance House, Kuwait.Status: Chairman of Accounting and Auditing Standards Board.

•

Mr. Hamad Abdulla Eqab

Position: Senior Vice President, Head of Financial Control, Albaraka Banking Group, BahrainStatus: Vice Chairman of Accounting and Auditing Standards Board

•

Mr. Jalil Al-Aali

Position: Partner, KPMG Fakhro, BahrainStatus: Chairman of Accounting Standards Committee

•

Mr. Jamil Darras

Position: Head, Central Accounting Section, Finance Department, Islamic Development Bank, Saudi ArabiaStatus: Chairman of Auditing and Governance Standards Committee

•

Shaikh Nizam Yaquby

Member of the Shari'a Board, Bahrain Islamic Bank, Kingdom of Bahrain

•

Sh. Dr. Mohamed Ali Al Qari

Position: Shari'a Supervisory Board, Bank Al Jazira, Saudi Arabia Status: Member

•

Sh. Essam Mohammed Al Sheikh Ishaq

Position: Shari’a Advisor & Board Member, Discover Islam Centre, Bahrain Status: Member

•

Mr. Fawad Laique

Position: Partner, Ernst & Young, KSAStatus: Member

•

Dr. Nordin Mohammed Zain

Position: Partner, Deloitte, MalaysiaStatus: Member

•

Mr. Firas Sadek Hamdan

Position: Head of Studies & Analysis Division, Accounting Department, Banque du Liban (Central Bank of Lebanon), LebanonStatus : Member

•

Mr. Simon Gray

Position: Director, Supervision, Dubai Financial Services Authority, United Arab EmiratesStatus: Member

•

Dr. Hussein Said Saifan

Position: Assistant General Manager, Jordan Islamic Bank, Jordan Status: Member

•

Mr. M. Faiz Azmi

Position: Partner,Global Islamic Finance Leader, PricewaterhouseCoopers, Malaysia Status: Member

•

Mr. Prakash Pathmanathan

Position: Assistant General Manager – Finance, Ithmaar Bank, BahrainStatus: Member

•

Mr . Oliver Ali Agha

Position: Managing Partner, Agha & Co, UAE Status: Member

•

Mr. Qudeer Latif

Position: Partner, Clifford Chance LLP, Dubai, United Arab Emirates.Status: Member

•

Dr. Khaled Al-Fakih

Position: Secretary General &

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