New push for Sharia-based transactions

New push for Sharia-based transactions

An accounting watchdog has launched a major initiative to streamline Sharia compliance of financial contracts for Islamic finance transactions.

The Accounting and Auditing Organisation for Islamic Financial Institutions’ (AAOIFI) contract certification programme involves certifying that financial contracts between Islamic financial institutions and their clients comply to international Sharia standards.

Objectives of the programme are to ensure harmonisation of Islamic finance practices and to enhance confidence in the Islamic financial systems.

For the Islamic financial institutions, the certification programme will provide independent endorsement on Sharia compliance that can assist the institutions in their marketing of Sharia-compliant products to their customers.

“The contract certification programme, which marks an important milestone for the international Islamic finance industry, will be overseen by AAOIFI’s Sharia Board and Accounting and Auditing Standards Board. Our Sharia board comprises all the eminent leading scholars and is acknowledged as the foremost global authority on Sharia for international Islamic finance.” said AAOIFI secretary general Dr Mohamad Nedal Alchaar.

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