Capital adequacy has become one of the most significant indicators for assessing the soundness of banking operations. The main objective of the present study is that how the local UAE Islamic banks are measuring the risk and expressing their capital adequacy. The data for the study collected from all the leading Islamic banks functioning in the UAE. The data for the study obtained from the annual reports of the Islamic banks in the UAE published during 2007-2011 in addition to the first quarter of 2012. The authenticity of the data verified with the opinion of management, who are aware of the financial reporting. The study limited to the impact of the Basel Accord standards on the assessment of the capital adequacy ratio of UAE Islamic banks.