Degree

Master of Science in Islamic Banking & Finance

Department

Department of Finance

Faculty/ School

School of Business Studies (SBS)

Date of Submission

Fall 2024

Supervisor

Mr. Haroon Tabraze, Adjunct Faculty, Department of Accounting & Law

Committee Member 1

Dr. Abdullah Zafar Sheikh, Dean, School of Business Studies (SBS)

Committee Member 2

Dr. Salman Ahmed Shaikh, Associate Professor, SZABIST

Committee Member 3

Dr. Ameenullah Aman, Associate Professor, SZABIST

Keywords

AAOIFI, Auditing, Financial Accounting Standards, FAS 42, FAS 43, Governance, Harmonization, Insurance, Islamic Accounting Standards, Islamic Insurance, Takaful, Standardization

Abstract

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) was established with the aim of developing Accounting, Auditing, Governance, Ethics, and Shari’ah standards for Islamic Financial Institutions (IFIs). The AAOIFI accounting standards have always served as a parameter and guideline for IFIs to follow through and enable them to conduct and report fair business transactions. In the Takaful sector, AAOIFI in principle issued four accounting standards for the Takaful Operators to comply with. These standards have recently been revisited and two new standards namely FAS 42 and FAS 43 have been issued to supersede FAS 9, FAS 12, FAS 13 and FAS 15 respectively. This has, however, resulted in another round of debate amongst scholars that was previously interpreted to the existing literature surrounding the level of adaption and harmonization of the Islamic Accounting Standards. This study, therefore, explores the consequences associated with the adaption of revised AAOIFI accounting standards by the Islamic Insurance sector. We specifically highlight the applicability and contingencies, operational changes, impact on public and business confidence and practical limitations of this implementation in the light of industry experts’ opinions. Overall, the evidence reviewed suggests there are multiple outcomes including few positive changes, certain challenges and operational contingencies that come with the revised implementation. The paper intends to contribute to the theoretical literature available on the standardization, harmonization, and acceptability of the AAOFI accounting standards and anticipates it will be meaningful for the industry experts, regulators, scholars, business professional, and officials of the standard setting body itself i.e. AAOIFI.

Document Type

Restricted Access

Submission Type

Thesis

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