New Standard Set for External Auditing of a Financial Institution’s Shariah-Compliance: S&P Global Ratings 

The recent auditing standard set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), pertaining to the external auditing of Shariah-compliance, will aid in the strengthening of governance and growth of Islamic finance, according to S&P Global Ratings (S&P).

Why it Matters?

Global Head of Islamic Finance at S&P, Dr Mohamed Damak, noted that whilst there are no unified Shariah rules that Islamic financial institutions have to follow, this new standard by AAOIFI addressed this gap by creating a hierarchy of the existing standards and regulations. Therefore, enforcing the new auditing standard would enhance Shariah governance and market discipline.

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