Standardised financial reports for Islamic institutions by 2019

By AFIQ AZIZ / Pic By ISMAIL CHE RUS

Islamic institutions including wakaf, zakat and baitulmal will be streamlined under a Shariah-compliant standard financial reporting, said Deputy Finance Minister Datuk Othman Aziz.

Othman said the research project on the matter, which began last year, comprises four phases and is expected to be completed by 2019.

“Currently, wakaf, zakat and baitulmal are using conventional standard framework in their financial reports while the Shariah-compliant framework is still under development,” he said, adding that the Accountant General’s Department of Malaysia (AGD) has also started the formulation process to ensure the framework can be used by all the states’ Islamic councils.

Currently, institutions from different states are using different sets of framework in their financial and accounting reporting.

“The financial and accounting report framework once materialised will streamline and standardise the reports among the said institutions, as well as the state Islamic councils,” Othman said at the launch of Account and Finance Reporting for Islamic Wakaf Institution in Putrajaya yesterday.

This initiative is a result of collaboration between the AGD and local universities, such as National University of Malaysia, International Islamic University of Malaysia and Universiti Utara Malaysia.

The convention is part of the project’s second phase, focusing on the recognition, measurement and reporting for the institution assets.

In the first phase, a committee was formed to discuss the raw input obtained and draft the framework for the other phases.

The third and fourth phases will be focusing on liability and expenses and revenue respectively.

Meanwhile, AGD said in a statement that it is important to document the result of this research and the innovative accounting practices in Malaysia, so that it can be a source of reference for others, especially in the Muslim world.

“It is not impossible that Malaysia will be able to create best practices in preparing the financial statements of these institutions,” the department said yesterday.