AAOIFI issues three final governance standards for industry adoption

The Governance and Ethics Board (AGEB / board) of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) issued three final standards namely, AAOIFI Governance Standard (GS)  10, “Shari’ah Compliance and Fiduciary Ratings for Islamic Financial Institutions”, GS 11 “Internal Shari’ah Audit for Islamic Financial Institutions”, and GS 12 “Sukuk Governance”.

In 2018, the projects were initiated and completed the various phases of standards development process which starts from preparing the preliminary study and consultation notes to issuing the exposure draft for industry feedback. The standards were discussed substantively in several public hearings. AGEB deliberated on the comments received during the public hearings, and in writing. Accordingly, the board directed the secretariat to finalize and issue the standards

The "Shari'ah Compliance and Fiduciary Ratings for Islamic Financial Institutions" standard was presented in eight countries, namely: bahrain, Pakistan, UAE, Saudi Arabia, Sudan, Oman, Malaysia, and Turkey, as part of the public hearing phase. The objective of the standard is to introduce and set out a principle-based guidance in Shari'ah governance and fiduciary ratings. It provides independent and comparable assessment based rating (or scoring) to the stakeholders with regards to an Islamic Financial Institutions (IFI), adherence to Shari’ah compliance, governance and fiduciary responsibilities.