What is AAOIFI?
The Accounting and Auditing Organization for Islamic Financial Institutions - a Bahrain-based standard-setting body whose Shariah standards are the most widely cited in Islamic finance.
AAOIFI issues Shariah, accounting, auditing and governance standards. Its Shariah standards define the permissible contract structures and the screening ratios many funds apply.
It is a standard-setter, not a regulator: it has no authority in Australia, and adopting its standards is a choice a fund makes and discloses. Other methodologies exist - MSCI Islamic, S&P Shariah, Dow Jones Islamic and various in-house methods - and they do not always agree.
Factual and educational information only. Nothing on this page is financial product advice, a recommendation, or a Shariah ruling. Consider your circumstances and the product's disclosure documents, and seek licensed advice and qualified scholarly guidance before acting.