The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is an international standard-setting body for the Islamic finance industry, headquartered in Manama, Bahrain. Established in 1991, AAOIFI develops and publishes accounting, auditing, governance, ethics, and Sharia standards for Islamic financial institutions worldwide.
Mandate
AAOIFI was created to address the absence of standardised accounting and auditing practices for Islamic financial institutions, which operate under fundamentally different principles than conventional banks and financial firms. The organisation develops standards that reflect Sharia compliance requirements while maintaining compatibility with international financial reporting expectations.
Standards
AAOIFI has issued over 100 standards across multiple categories. Sharia standards address the permissibility and structuring of Islamic financial products including murabaha, musharaka, ijara, sukuk, and takaful. Accounting standards establish financial reporting requirements adapted for Islamic financial instruments. Auditing standards address both financial auditing and Sharia compliance auditing. Governance standards cover Sharia supervisory board composition and operations. Ethics standards address professional conduct in Islamic finance.
Global Adoption
AAOIFI standards have been adopted or referenced by regulators in numerous jurisdictions. Bahrain’s Central Bank requires AAOIFI standards for Islamic financial institutions operating in the kingdom. Other jurisdictions that have adopted or reference AAOIFI standards include Jordan, Sudan, Qatar, Syria, and several countries in Southeast Asia and Africa. The standards also influence Islamic finance practice in jurisdictions that have not formally adopted them.
Membership
AAOIFI’s membership includes central banks, Islamic financial institutions, and other participants from approximately 45 countries. This broad membership base lends credibility to the standards and ensures they reflect diverse market practices.
Bahrain Headquarters
AAOIFI’s location in Bahrain reflects and reinforces the kingdom’s position as a leading centre for Islamic finance. Bahrain was among the earliest Gulf states to develop comprehensive Islamic banking regulation, and hosting AAOIFI provides institutional depth to its claim as a global Islamic finance hub.
Role in Vision 2030
AAOIFI supports the Bahrain Economic Vision 2030’s financial services development objectives. The presence of the global standard-setter for Islamic finance in Manama enhances Bahrain’s credibility and attractiveness for Islamic financial institutions, fund managers, and fintech companies focused on Sharia-compliant products. It is an institutional asset that no competitor can replicate simply by offering tax incentives or regulatory concessions.