Key Strategies for Improving the Standardization of Audit under Islamic Principles

This article discusses the development of auditing standardization based on Islamic principles as formulated by AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions), headquartered in Bahrain.

The study aims to critically analyze AAOIFI approaches and compare them with global audit standardization practices conducted by the International Auditing and Assurance Standards Board (IAASB) under the International Federation of Accountants (IFAC).

Using methods such as comparison, analysis, and synthesis, as well as logical and systemic approaches, the authors examined two groups of auditing standards, IAASB and AAOIFI, highlighting their differences.

Findings reveal that current AAOIFI standards, such as Auditing Standard for Islamic Financial Institutions ASIFI 1 “Objectives and Principles of Audit” and ASIFI 2 “Audit Report,” have been in use for about 25 years. These standards are outdated and require urgent transformation. The proposed AAOIFI Standard on Auditing (SOA) 1 “Audit Foundations” seeks to consolidate existing standards but risks being excessively bulky and less comprehensible compared to IAASB standards.

The authors recommend leveraging IAASB’s experience to adapt the AAOIFI standards, including the creation of an AAOIFI Assurance Tasks Concept akin to IAASB’s international concept, enabling clarity and accessibility for global auditing professionals while adhering to Islamic principles.

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