Khaled Al Fakih, the new secretary-general of the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), outlined plans for a sweeping review of its guidelines. Some of AAOIFI's reforms may prove controversial by challenging entrenched interests in the fast-growing business. Islamic financial assets hit $1.3 trillion globally last year, a 150 percent rise in the past five years, as the industry expanded beyond core markets in the Middle East and Malaysia, financial lobby group TheCityUK estimates. "We would like to see insightful debate…that can help us develop standards that can benefit the industry," Fakih said ahead of AAOIFI's annual meeting in Bahrain on May 7- 8. Organization plans to start consultations on reforming the operations of Sharia boards, the groups of Islamic scholars which rule on whether financial institutions' activities and products are religiously acceptable, by the middle of this year. A final draft of the reforms is not expected to be ready before the end of next year at the earliest. AAOIFI will also work on a new framework for disclosing financial data, and will look at revising standards for takaful, investment accounts and other products. Basic elements of Islamic finance such as murabaha and mudaraba would be reviewed next year.
