International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Comparative Analysis on AAOIFI, IFSB and BNM Shari’ah Governance Guidelines
NawalKasim, Sheila Nu NuHtay, Syed Ahmed Salman

Issue of the corporate governance has emerged with the birth of the corporation. However, it became an attractive issue due to the financial crisis. Similarly, the issue of Shari’ah compliance in Islamic finance is given the attention when the Islamic finance industry arose. Therefore, renowned international organizations such as Accounting, Auditing Organization for Islamic Financial Institutions (AAOIFI) and Islamic Financial Services Board (IFSB) and Bank Negara Malaysia (BNM) have provided the Shari’ah governance guidelines. However, to our knowledge, there is no research has been conducted in comparing these guidelines. In our opinion, it is necessary to compare them in order to find out whether there is any variation among the suggestions given by the guidelines. Therefore, the purpose of this paper is to make a comparison among these Shari’ah governance guidelines. It has been found that Shari’ah governance framework provided by AAOIFI has seven sections. In the case of IFSB, the framework includes scope and approach of Shari’ah governance system and the qualitative characteristics of Shari’ah Supervisory Committee. BNM provides the general requirements of the framework, qualitative characteristics and provide the guidelines on Shari’ah review and Shari’ah audit. BNM further provides the guideline on the functions of Shari’ah risk management and Shari’ah research in Islamic finance.

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