Analysis of the level of compliance of sukuk issuance in Türkiye with AAOIFI standards

The purpose of this study is to measure the compliance level of Sukuk (Islamic Bond) issued through Participation Banks in our country with the relevant standards published by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and to study the compliance between Turkish accounting standards (TMS) and Turkish Financial Reporting Standards (TFRS) currently used in Turkey and AAOIFI accounting standards. The source of the information in this study is the activity reports of Participation Banks and asset leasing companies on which they issue sukuk for the years 2021-2022. In the study, Dichotomous method were used to measure the compliance by using an unweighted disclosure index. The results of the study show that the general compliance level of participation banks in Turkey with Financial Accounting Standard (FAS) 33 for the years 2021 and 2022 was 50%, while the result was 47% for the asset leasing companies. According to this result, participation banks and asset leasing companies which play an intermediary role in sukuk issuance should be more descriptive in reporting, adopt FAS(s) standards instead of TFRS and TMS in order for the investors to be better informed, and their accounting systems should be held in accordance with AAOIFI standards.