AAOIFI Code of Ethics

The Qur'an and Hadith or Sunnah provide a moral code that ensures ethical behaviour requiring honesty of intention behind actions, fair and just dealings, transparency, accountability, and social responsibility.

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has issued a ‘Code of Ethics’ in 2021 applicable on both individuals (Islamic finance professionals) and the Islamic financial institutions (IFIs).

AAOIFI was established in 1991 in Bahrain and is the leading international not-for-profit organisation primarily responsible for development and issuance of standards for the global Islamic finance industry. It has issued standards in the areas of Shari’ah, accounting, auditing, ethics and governance for international Islamic finance. It is supported by a number of institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from many countries.

AAOIFI standards are currently followed by all the leading Islamic financial institutions across the world and have introduced a progressive degree of harmonisation of international Islamic finance practices.


Code of Ethics for Islamic Finance Professionals
Extract from Preface

PR1: All human beings are blessed with an innate sense of right and wrong and the freewill to make a choice. This innate sense, duly augmented through divine guidance in the form of Holy Books and Allah’s messengers as role models, informs us that every individual is being tested on their choices made in this world, on which depends their ultimate success (or failure) in the hereafter.

PR2: Islam regards ethical conduct as a pre-requisite for man’s ultimate success manifested through contentment in this worldly life and eternal bliss in the hereafter. In this world, unethical practices may lead to temporary gains, but will risk censure in this world and the next.

PR3: Given that Prophet Mohammad (peace be upon him) was sent to ‘perfect good character’, it is appropriate to state that ethics is the spirit of Shari’ah. One cannot claim conformity to the letter and spirit of Shari’ah in the absence of good ethics. For an Islamic finance professional, it is essential to follow the ethical codes embedded in and set out by the Shari’ah and also follow the law.

PR4: An effective way to conceptualize ethics is through the lens of Adl (justice) and Ihsaan (excellence), where the former is to be seen as mandatory conduct while the latter, highly recommended. Failure to achieve and maintain Adl results in Zulm (injustice). Such is the interplay between the concepts of Adl and Ihsaan that typically one cannot maintain Adl on continuing basis unless one pursues Ihsaan. This implies that constant pursuit of excellence in ethics is what is aspired in Islam, as opposed to a minimalist, checklist-based approach. One ought to make proper investment of time, effort and money to ensue ethical conduct at all times.

Code of Ethics for Islamic Finance Professionals