As the world recovers from the after-effects of COVID-19, the growth of Islamic banking and finance continues in different parts of the world. It was certainly a productive year for AAOIFI as a number of standards were finalized while a number of other initiatives progressed well. The capacity-building and awareness and advocacy initiatives were conducted successfully during the year. It is expected that the efforts of developing important standards shall continue during the year 2023 together with other capacity-building and awareness and advocacy programs.
Review of 2022
As we concluded the annual Islamic banking and finance conference jointly organized by AAOIFI and IsDB toward the end of November 2022, it was pleasing to see the quality and quantity of stakeholders that attended the two-day conference in Bahrain. More than 700 people attended the conference from no fewer than 30 countries while more than 500 joined on virtual media platforms including Zoom and YouTube. Additionally, the deputy prime minister of Bahrain, Sheikh Khalid Abdulla Al Khalifa graced the conference with his presence. In addition, three governors of the central banks, various diplomats and senior leaders within the global Islamic banking and finance industry attended the conference and shared their knowledge and expertise with the stakeholders.
This is also a gauge to assess the return to normalcy for market activities during the year 2022 to almost pre-COVID-19 times. This is true for AAOIFI as well, where several technical board meetings and other committee meetings, which were earlier only being conducted virtually, have returned to the normal course. However, it is believed that the hybrid nature of events and meetings shall continue for the foreseeable future.
During the year 2022, AAOIFI conducted 19 meetings of its AAOIFI Shariah Board, AAOIFI Accounting Board (AAB) and AAOIFI Governance and Ethics Board (AGEB), as well as more than 100 subcommittee meetings and short working group meetings. These meetings resulted in the issuance of three standards by AAB (FAS 1 (Revised 2021) ‘General Presentation and Disclosures in the Financial Statements’, FAS 39 ‘Financial Reporting for Zakah’,
FAS 40 ‘Financial Reporting for Islamic Financial Windows’) and two standards by AGEB (‘Islamic crowdfunding’ and ‘Syndicated financing’) and various exposure drafts of the standards.
Additionally, there are more than 40 projects under these three boards that are at different stages of standards development. To discuss some of these standards and to finalize others, AAOIFI conducted more than 22 public hearings in different parts of the world including two physical events.
On capacity-building, more than 29 and 355 individuals took the Certified Islamic Professional Accountant (CIPA) and Certified Shariah Advisor and Auditor (CSAA) qualifications respectively. This increased the total number of AAOIFI fellows to 2,648. Additionally, AAOIFI had three meetings of the AAOIFI Education Board, more than 50 meetings of the subcommittees and conducted more than 25 workshops during the year.
AAOIFI also inducted 19 new institutional members during the year 2022; this included four regulatory and supervisory institutions and 15 banks and financial institutions. To enhance collaboration with important stakeholders, AAOIFI continued to engage with the regulators, banking associations and directly with banks and financial institutions to enhance understanding of AAOIFI standards and their adoption.
AAOIFI also launched two issues of its Journal of Islamic Finance Accountancy, as well as finalized the AAOIFI Footprint Report 2022. Additionally, AAOIFI organized a number of conferences and events including two flagship conferences and supported and participated in a number of other events organized by various industry stakeholders.
AAOIFI is pleased to note that the increased engagements with the right stakeholders have resulted in the gradual increase in the adoption of AAOIFI standards. As such, AAOIFI standards are at present adopted at various levels by more than 45 countries and more than 50 regulatory jurisdictions as reported in the AAOIFI Footprint Report 2022.
Preview of 2023
With the increased effort and engagement, it is expected that the year 2023 will be an equally productive year for AAOIFI. The technical boards plan to have 16 board meetings and issue 10 standards and issue 13 exposure drafts during the year. Additionally, AAOIFI plans to conduct more than 50 public hearings, workshops and roundtables for various standards.
On capacity-building, in addition to the usual intake of AAOIFI fellows, the aim is to launch CIPA in the Russian language, as well as have it translated into other languages including Turkish, Bahasa Indonesia and French. Additionally, the aim is to launch the revamped CSAA qualification in the form of CSAd and CSAu fellowship programs. AAOIFI shall also issue the calendar for AAOIFI workshops organized throughout the year on various important topics.
On awareness and advocacy, AAOIFI shall continue to organize its two flagship conferences, as well as other advocacy and awareness initiatives to enhance the understanding and awareness of AAOIFI standards and facilitate their adoption.
Any public opinion or media appearance is the author’s independent personal opinion and should not be construed to represent any institution with whom the author is affiliated.
Dr Rizwan Malik is the head of standards implementation and strategic developments at the Accounting & Auditing Organization of the Islamic Financial Institutions (AAOIFI). He can be contacted at rmalik@aaoifi.com.