The development of legislation regarding participation banks (or interest-free financial institutions) is a necessity of the limitlessness of the economic world. Islamic Countries hold the world's high oil supply and precious metals such as gold. Since most citizens and investors in Turkey are Muslim, they can be included in this group. The growth of trade with these countries necessitated offering an alternative for the investments of people who do not want to work with banks. Therefore, the activities of participation banks must be sufficient and functional. The most crucial distinguishing participation banks from traditional banks is the interest-free profit share. Since these institutions have the feature of generating non-interest income and earning interest-free income to their customers, a different criterion was needed from the traditional bank legislation. Our study mentions the development of participation banks, their differences with conventional banks, and the relevant literature. The accounting and auditing legislation for interest-free financial institutions is also emphasized.