Comparative Analysis of Bai-Al-sarf; Shari’ah Standards of AAOIFI & BNM

Abstract

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Bank Negara Malaysia (BNM) are the two biggest international standard setting bodies. These bodies issued standards on Shari’ah, auditing and accounting for Islamic Financial Institutions around the globe. AAOIFI is the top recognized whereas BNM is at second in acceptance. This paper makes the comparison of Shari’ah standard on bai Al-sarf issued by AAOIFI and BNM to highlight the differences and make few suggestion for the standardization. Archival research methodology is used for the comparison and analysis. The study compares the similarities and differences between the two sets of standards, with a focus on their principles and objectives. The paper provides valuable insights into the similarities and differences between the two Shari’ah standards. Furthermore, it is suggested to remove the differences in order to increase the acceptability around the globe. The removal of differences and standardize the conditions of Bai-sarf, the practices of trading in currencies may be harmonize throughout the world which enhance the effectiveness and acceptability not only in Muslim world but in Non-Muslim world.