Adoption of AAOIFI accounting standards by Islamic banks of Bahrain

Adel Mohammed Sarea (College of Business and Finance, Ahlia University, Manama, Kingdom of Bahrain)
Mustafa Mohd Hanefah (University SAINS Islam Malaysia, Nilai, Malaysia)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Publication date: 21 October 2013



The objective of this paper is to determine the level of compliance with Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) accounting standards by Islamic banks of Bahrain.


The paper is based on diffusion of innovation theory whereby the perceived relative advantage, compatibility, complexity, trialability and observability factors are expected to influence the level of compliance with AAOIFI accounting standards.


The findings indicate that Islamic banks of Bahrain are in full convergence with AAOIFI accounting standards.

Research limitations/implications

This research, just like many other studies, faces data limitations. Sample size employed for this study contains only the accountants in Islamic banks of Bahrain.


The results of this paper are expected to serve as a guide to the regulatory bodies and the setter of accounting standards for Islamic financial institutions (IFIs).



Mohammed Sarea, A. and Mohd Hanefah, M. (2013), "Adoption of AAOIFI accounting standards by Islamic banks of Bahrain", Journal of Financial Reporting and Accounting, Vol. 11 No. 2, pp. 131-142.

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