Could you provide a brief journey of how you arrived where you are today?
Before I was approached to head AAOIFI, I was working in financial institutions on Wall Street and teaching in The George Washington University in the USA. I feel honoured to be able to apply my experience and directly contribute towards the development of the international Islamic finance industry.
What does your role involve?
As secretary-general, which is basically the executive director of AAOIFI, I co-ordinate the activities of the general assembly, the board of trustees, the standards board, the Shariah board, the executive committee and sub-committees and act as their rapporteur. I run the day-to-day affairs and activities of the company, as well as co-ordinating and supervising the studies relating to the preparation of statements, standards and guidelines promulgated by AAOIFI.
My responsibilities also include strengthening ties between AAOIFI and other organizations with similar objectives, and representing AAOIFI at conferences, seminars and scientific meetings.
What is your greatest achievement to date?
We are proud that we have issued 63 standards and have embarked on a program to formulate a number of new standards, as well as reviewing the existing ones. AAOIFI standards have been adopted – either through mandatory wholesale adoption or as guidelines – in all the major Islamic finance centers across the globe. It has been estimated that over 90% of Islamic financial institutions in the world today use our standards in one way or another. We are also proud that AAOIFI is now supported by more than 130 members from more than 30 countries, and that we have launched the first and only internationally recognised professional accountancy program for Islamic financial services.
Which of your products/services deliver the best results?
All our standards are designed to enhance the integrity and support the expansion of the international Islamic finance industry. Our accounting standards have improved clarity and transparency in the financial reporting of Islamic financial institutions, and our Shariah standards have promoted the internationally accepted uniform application of Shariah for specific Islamic financial practices and mechanisms. Meanwhile, our auditing, ethics and governance standards give guidance to Islamic financial institutions on Shariah compliance and supervision, as well as an overall governance framework. In addition to the standards, our Certified Islamic Professional Accountant program will help to encourage greater professionalism in human resources capability for the international Islamic finance industry.
What are the strengths of your business?
AAOIFI’s strengths emanate from the way that the standards are developed and reviewed, which is through consultations with the international Islamic finance industry, the accounting and auditing professions and other stakeholders in the industry. Therefore the standards are driven by the industry itself. We also provide a much-needed avenue for the interface between market players and regulators, ensuring that a fine balance of market development and regulatory requirement is maintained.
What are the factors contributing to the success of your company?
We have benefited greatly from the invaluable support that has been extended to us by the regulatory authorities, our board of trustees, our founding and other members. The contribution from our accounting and auditing standards board – consisting of representatives from, amongst others, the international Islamic finance industry and the accounting and auditing professions – has been critical in ensuring the progress of AAOIFI. We are also fortunate to have the world’s leading Shariah scholars, representing all the schools of thought, on our Shariah Board, which is regarded as the foremost Shariah authority for the international Islamic finance industry.
What are the obstacles faced in running your business today?
In order to ensure that our standards remain beneficial to the international Islamic finance industry, we need to keep up with market development – and we will continue to do so by streamlining our operations and devoting significant resources to analysis and research of standards. We also need to continue promoting the adoption of our standards – which involves highlighting the value propositions of standards to national regulatory authorities and standard-setting organizations.
Where do you see the Islamic finance industry, maybe in the next five years?
We see further expansion of the industry, in terms of total volume of business, as well as number of Islamic products and services on offer. Emphasis on the financial performance of individual Islamic financial institutions will become greater and this will likely result in higher cross-border activities and consolidation of the industry.
Name one thing you would like to see change in the world of Islamic finance?
For the industry to focus on developing real Islamic finance solutions instead of simulating conventional finance products. The basis of Islamic finance practises is distinct and distinguishable from conventional finance practises. Therefore, the financial products and investment mechanisms that the Islamic finance industry offers must be genuine Islamic finance solutions that reflect and encapsulate what Islamic finance is all about. We will be doing a grave injustice to the very idea of Islamic finance, and to the community we seek to serve, if the products that we offer are essentially conventional products that have been modified and then labelled as Islamic products.
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is an Islamic international autonomous non-profit making corporate body that prepares accounting, auditing, governance, ethics and Shariah standards for Islamic financial institutions.