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Islamic Banking and Finance
AAIOFI was established in 1990 to promote and maintain Shariah standards for the Islamic financial institutions. On addition to this it organizes professional development programs meant to upgrade the human resource that work in the financial industry as well as the development of the structures of governance that controls the Islamic financial institutions. The commission has more than 200 members from about 45 countries. The members to the institution include Islamic financial institutions, central banks and other parties that work in the financial industry (Vinnicombe, 2012). The objective of this commission is to develop auditing and accounting ideas that are relevant to the Islamic institutions, disseminate about this accounting ideas, promulgate, prepare and interpreted the auditing and accounting standards for the Islamic financial institutions, and to review and amend the accounting and accounting standard meant for the Islamic financial Institutions.
Data Analysis of GPI Based on AAOIFI Sharia Mandates
The format of the AAIOFI is similar to that of the IFRS, with few exceptions in terms of wording. AAIOFI financial report is in line with the IFRS format where statement of the financial position is made up of assets, and total liabilities and shareholders’ equity. Gulf Pharmaceutical Industries P.S.C statement of the financial position is in line with AAOIFI financial statements format for balance sheet, income statement and statement of the cash flow (Sarea, 2012). The central Shariah principle is to promote riba free financial transactions. GPI Company reports the finance cost of 26259 000 AED in 2013 and 23008 000 AED in 2012. For a conventional company would have reported interest charges on the loan given by the financial institutions. This shows that the company is in compliance with AAIOFI. Shariah aims at promoting fairness where the gains for the year are shared by the stakeholders in a fair way. In this regard the GPI Company appropriated its earning to both controlling and un-controlling interests…………………