AAOIFI stands for the Accounting and Auditing Organization for Islamic Financial Institutions. It is a non-profit organization that was established in 1991 to develop accounting, auditing, governance, ethics, and Shari’ah standards for Islamic financial institutions. AAOIFI aims to enhance the transparency, efficiency, and stability of the Islamic finance industry by providing standardized guidelines and frameworks.
Clients may impose restrictions to ensure investments align with their ethical values.Examples include excluding investments in certain industries or focusing on environmentally sustainable companies.
Purification refers to the process of cleansing or purging any income that are derived from non-compliant sources. This is done to ensure that the financial activities and earnings remain in accordance with Shari’ah principles.NoorVest calculates the portion of income that is non-compliant and shares it with the client on an annual basis.
For more information on AAOIFI standards, the detailed list can be accessed through the AAOIFI website through: https://aaoifi.com/shariah-standards-access-form/?lang=en