Sri Lanka : Accounting and Auditing
Sri Lanka has made considerable efforts in aligning its accounting and auditing practices with international standards to establish a high-quality corporate financial reporting system. Corporate accounting and disclosure practices, particularly for...
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| Format: | Accounting and Auditing Assessment (ROSC) |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/05/6589025/sri-lanka-report-observance-standards-codes-rosc-accounting-auditing http://hdl.handle.net/10986/14536 |
| Summary: | Sri Lanka has made considerable efforts
in aligning its accounting and auditing practices with
international standards to establish a high-quality
corporate financial reporting system. Corporate accounting
and disclosure practices, particularly for publicly traded
companies, have improved over the past decade. Among
forward-looking actions has been the enactment of the Sri
Lanka Accounting and Auditing Standards Act and
establishment of the Sri Lanka Accounting and Auditing
Standards Monitoring Board. However, there appears to be a
certain degree of noncompliance in both accounting and
auditing practices, resulting mainly from weak enforcement.
The weakness is primarily attributed to inadequate
regulatory capacity. This report provides an appraisal of
the accounting and auditing practices within a broader
context of the Sri Lanka institutional framework, and the
capacity needed to ensure high-quality corporate financial
reporting. Building on past achievements, comprehensive
efforts are necessary for strengthening the capacity of
regulators, and ensuring effective coordination. Also, there
is an urgent need for a system of independent oversight of
the audit profession that will protect public interest. This
report provides a wide range of policy recommendations
focusing on building regulatory capacity, strengthening
enforcement mechanisms, initiating legal reforms,
undertaking awareness programs for shareholders and top
management, urging compliance with guidelines of the
International Federation of Accountant, improving education
and training, introducing independent oversight of the audit
profession, strengthening the professional association,
publicizing more widely the enforcement actions against
non-compliances, upgrading the licensing procedures for
accountants and practicing auditors, and, disclosing audit
and non-audit fees separately. These recommendations are
expected to provide inputs for designing a country action
plan that will further improve the accounting and auditing
regime of Sri Lanka. |
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