IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

The Institute of Chartered Accountants of Sri Lanka

Introduction

The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

Part 1:	Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
Part 2:	Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

Setting auditing, accounting, ethics, public sector and education standards; and
Regulating the accountancy profession.

Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

Questions or comments may be sent to complianceassessment@ifac.org.

Section 3 -- Member Body General Information

1. Country:

Sri Lanka

2. Name of member body:

The Institute of Chartered Accountants of Sri Lanka

Or please specify name:

3. Individual responsible for preparation:

S. Sockalingam

4. Date member body became a member of IFAC:

Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

10 / 1977

Questions 5 - 22 are for internal use only

Section 3G -- Affiliations

23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):

[1] South Asian Federation of Accountants [SAFA]
[2] Confederation of Asian Pacific Accountants [CAPA]
[3] International Federation of Accountants [IFAC]

Section 4 -- Statutory Framework

Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

Section 4A -- The Companies Act or Commercial Code

The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

24. What is the full name of:

a). the Act or the Code:		Companies Act No. 17 of 1982 & Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995
b). the Enacting body:		Companies Act - Ministry of Trade, Commerce & Consumer Affairs / Sri Lanka Accounting & Auditing Standards Act - Ministry of Finance
c). date the Act or Code came into force:		05 / 1982

25. How can IFAC obtain a copy of the Act or Code?

On request hard copy will be sent

26. Is the Act or Code available in English?

Yes

27. What are the types of entities covered by the Act or the Code?

Please check all that apply.

	Listed entities					Other (please specify): Unit Trusts; Factoring Companies; Fund Management Companies; Insurance and Finance Companies
	Private companies					Other (please specify):
	Governmental					Other (please specify):
	Not-for-profit					Other (please specify):

28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.

Please check all that apply.

	No	Yes	(If YES, please describe)
Listed entities			(1) In accordance with requirements of Companies Act No. 17 of 1982 ; (2) In accordance with requirements of Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995
Private companies			(1) In accordance with requirements of Companies Act No. 17 of 1982 ; (2) In accordance with requirements of Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995
Governmental			(1) In accordance with requirements of their individual Acts of Incorporation; (2) In accordance with requirements of Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995
Not-for-profit
Other (please describe) Unit Trusts; Factoring Companies; Fund Management Companies; Insurance and Finance Companies			(1) In accordance with requirements of their individual Acts of Incorporation; (2) In accordance with requirements of Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995
Other (please describe)

29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:

Please check all that apply.

	No	Yes	(If YES, please describe)
Listed entities			Accounts must be prepared in accordance with the Sri Lanka Accounting Standards and audited in accordance with the Sri Lanka Auditing Standards
Private companies			Accounts must be prepared in accordance with the Sri Lanka Accounting Standards and audited in accordance with the Sri Lanka Auditing Standards
Governmental			Accounts must be prepared in accordance with the Sri Lanka Accounting Standards and audited in accordance with the Sri Lanka Auditing Standards
Not-for-profit
Other (please describe)
Other (please describe)

30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?

Yes

If YES, please indicate the term of appointment:

1 Year(s)

31. Who appoints the statutory auditors?

Please check all that apply.

	Shareholders					Management
	Board of directors					Other (please specify):
	Audit committee					Other (please specify): For government owned companies incorporated under the Companies Act No 17 of 1982, appointment by shareholders.
	Government agency					Other (please specify): Auditor General is auditor for Government Ministries, Depts and Public Companies

32. Does the Act or Code require joint auditors for the statutory audit?

Yes

If yes, please describe the requirement:

33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?

Yes

If yes, please describe the requirement:

Section 4B -- Securities Market Regulations

Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:

the major items of Legal authority for such requirements

[1] Companies Act No. 17 of 1982
[2] The Securities Council Act No. 36 of 1987
[3] Regulations of Insurance Industry Act No.43 of 2000
[4] The Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995
[5] Banking Act 1988
[6] Finance Companies Act No. 78 of 1988
the Enacting body(ies)

[1] Ministry of Trade, Commerce & Consumer Affairs
[2] Ministry of Finance
[3] Ministry of Finance
[4] Ministry of Finance
[5] Ministry of Finance
[6] Ministry of Finance
the latest amendment date?

N/A

35. How can IFAC obtain a copy of the Legal authority?

On request hard copies will be sent to IFAC

36. Is the Legal authority available in English?

Yes

37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?

Yes

If YES, please describe the requirement:

Industry like banking industry and insurance industry will have to comply with the specific requirements of the industry related Act

38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?

Yes

If YES, please describe the requirement:

39. Who appoints the statutory auditors of listed entities?

Please check all that apply.

	Shareholders			Management
	Board of directors			Other (please specify):
	Audit committee			Other (please specify):
	Government agency			Other (please specify):

40. Are auditors who perform audits of listed entities appointed for a specified period?

Yes

If YES, please indicate the term of appointment:

1 Year(s)

41. Are joint auditors required for audits of listed entities?

Yes

If YES, please describe the requirement:

42. Is rotation of the auditor or audit firm for audits of listed entities required?

Yes

If YES, please describe the requirement:

Section 5 -- Auditing Standards

Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

Section 5A -- Statutory Framework

43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:

Type of entity	Name of applicable legal authority	Date of last amendment (e.g. MM/YYYY 06/2001)	Name of body responsible for setting audit and other assurance standards
Listed entity	Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995 (Ministry of Finance)	07/1995	Institute of Chartered Accountants of Sri Lanka
Other (please describe)
Other (please describe)
Other (please describe)

On request hard copies can be sent

Yes

Section 5B -- Standard-Setting (Institute of Chartered Accountants of Sri Lanka)

44. For Institute of Chartered Accountants of Sri Lanka, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.

Established by Act of Parliament, Autonomous

1) Sri Lanka Auditing Standards (SLAuSs)
2) Sri Lanka Auditing Practice Statements

45. How many voting members does the standard-setting body have?

(1) Council - 16 members; (2) Auditing Standards Committee - 8 members

46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?

	Voluntary
	Employed
	Both - Please describe:		Members of the Council and Committees are voluntary and assisted by full time employed technical staff

47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?

(1) Best person for the job
(2) Includes Country's Auditor General
(3) Committee may co-opt any person with relevant expertise

48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?

Institute - in terms of the Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995

49. What is the term of appointment for members?

4 Year(s)

50. For how many years has the standard-setting body been in existence?

8 Year(s)

51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:

Note: Please enter a whole number using commas (e.g., 4,000,000)

26,000

Please enter the exchange rate used to calculate this number.

Note: Please enter a decimal amount (e.g., 4.0027)

100.00

52. To what entity is the standard-setting body accountable?

The Statutory Auditing Standards Committee is accountable to the Council of the Institute. The Institute comes under the Trade Ministry, but autonomous

53. Describe the due process followed by the standard-setting body. Please include explanations of the following:

public exposure of standards

(1) International Auditing Standards are adopted as Sri Lanka Auditing Standards after Due Review Process.
(2) Exposed to Audit Practitioners and interested parties for comments.

The ICASL starts due review process only once the relevant International Standard promulgated, and any alteration to such standard will be done in Sri Lanka, only in circumstances such as, if it is contrast with the existing statute or not practical in local context. It is our intention to adopt the International Standards simultaneously in the near future.
accessibility of meetings (i.e., public or private)

Committee meetings are private, but public meetings are held if need arises.
approval process for final standards (i.e., majority required to approve final standards)

5 out of 8 members of Auditing Standards Committee recommend the Standards to the Council for adoption.

Once the SLAuSs are adopted and gazetted by the Council of the ICASL, such standards become part of the law, which are enforceable on SBEs defined under the Sri Lanka Accounting & Auditing Standards Act No.15 of 1995.
other relevant due process activities

The Statutory Auditing Standards Committee is assisted by Steering Committees. Both Committees are assisted by full-time empolyed Technical Staff.

54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?

12 Day(s)

Section 6 -- Ethics

Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

Section 6A -- Statutory Framework

55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.

Type of professional covered	Name of applicable legal authority	Date of last amendment (e.g. MM/YYYY 06/2001)	Name of body responsible for setting ethics standards
Professional Accountants in Public Practice	Enabling Act	Year 1998	Institute of Chartered Accountants of Sri Lanka
Professional Accountants in Business	Enabling Act	Year 1998	Institute of Chartered Accountants of Sri Lanka
Professional Accountants in the Public Sector	Enabling Act	Year 1998	Institute of Chartered Accountants of Sri Lanka
Other (please describe)

On request, hard copies can be sent.

Yes

Section 6B -- Standard-Setting (Institute of Chartered Accountants of Sri Lanka)

56. For Institute of Chartered Accountants of Sri Lanka, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.

Autonomous

Code of Professional Conduct & Ethics.

The Code is based on IFAC�s Code of Ethics. However, some additional requirements being added to the local Code in order to incorporate the requirements stipulated in the Act of Incorporation and Regulations of the ICASL.

57. How many voting members does the standard-setting body have?

10 Members

58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?

	Voluntary
	Employed
	Both - Please describe:		Voluntary Members and assisted by full-time employed Technical Staff

59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?

[1] Best person for the job
[2] Seniority in profession
[3] Country's Auditor General is included
[4] Private & Public Members

60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?

Council of the Institute

61. What is the term of appointment for members?

2 Year(s)

62. For how many years has the standard-setting body been in existence?

40 Year(s)

63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:

Note: Please enter a whole number using commas (e.g., 4,000,000)

Please enter the exchange rate used to calculate this number.

Note: Please enter a decimal amount (e.g., 4.0027)

100.00

64. To what entity is the standard-setting body accountable?

Accountable to the Council of the Institute

65. Describe the due process followed by the standard-setting body. Please include explanations of the following:

public exposure of standards

[1] Based on the IFAC Standards after Due Review Process
[2] Exposed to all members for comments
accessibility of meetings (i.e., public or private)

Meetings of Ethics Committee and Council are private. Public Meetings are held, if necessary.
approval process for final standards (i.e., majority required to approve final standards)

Unanimous approval is sought
other relevant due process activities

Council is assisted by the Ethics Committee appointed by the Council. Both assisted by full-time Technical Staff.

66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?

12 Day(s)

Section 7 -- Education

Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

Section 7A -- Education Requirements

67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:

Education system basically consists of 3 stages. These are primary, secondary and tertiary. Education is compulstory up to 14 years of age

68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?

Yes

Under the regulations gazetted under the Companys' Act, any person having the qualifications and experience stipulated therein can be registered as an auditor. However, in terms of the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995, only the members of the Institute of Chartered Accountants of Sri Lanka who obtains the certificate to practise, can be auditors of "Specified Business Enterprises", which includes all listed companies and the other companies with large public interest. (The law does not define "large public interest"; however, the Sri Lanka Accounting and Auditing Standadrs Act. No. 15 of 1995 includes reference to specific types of entities).

The private companies can even be audited by Non Chartered Accountants registered with the Registrar of Companies.

However, to work as an accountant, there is no specific legal regulation, though in practise certain qualifications, experience and competence are considered a must.

69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.

	Academic requirements The Sri Lanka or London University G.C.E. A/L in 3 subjects at one sitting with Mathematics or Accountacy or Physics as one of the 3 subjects and 2 credit passes in the same or subsequent attempt. If Mathematics or Accountancy or Physics is not one of the subjects at the Advanced Level, a credit in Mathematics-I or a pass in Mathematics-II or a credit in Commerce & Accounts at G.C.E. O/L Examination is required
	Professional examinations Passing final 1 & 2 examinations conducted by the Institute of Chartered Accountants of Sri Lanka
	Practical experience Normal requirement is 4 years. But a consession of maximum up to 1 year from intermediate level training is available for students who possess specific additional qualifications recognised by the Institute of Chartered Accountants of Sri Lanka
	Final qualifying examination Final 2 examinations
	Other (please describe) From 2005 onwards case study will be introduced

70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.

	A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
	A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
	Member body(ies) establishes the education requirements for the accounting profession.
	Other (please describe)

71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.

A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.
The Education Committee is appointed by the Council. It meets regularly and forwards its recommendations relating to the educational matters to the Council
How many voting members does the relevant body(ies) have
All members of the Committee has voting rights. The number of members vary from 15 to 20

Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?

	Voluntary
	Employed
	Both - Please describe:		Members of the Committee serve on voluntary basis and they are assisted by the staff employed by the Institute of Chartered Accountants of Sri Lanka

For how many years has the body been in existence?

40 Year(s)

72. How would you describe the authority that the education requirements have?

	Requirements are legally-based
	Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
	Requirements are set in member body(ies) policy document(s).
	Other (please describe)

72 a. How can IFAC obtain copies of these documents?

72 b. Are these documents available in English?

Yes

73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?

Same

Different

If different, please briefly describe the main differences:

74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.

	The education program and final examination are delivered by the member body.
	The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
	The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
	Other (please explain)

75. Once qualified as a member of your professional body, can members offer their services directly to the public?

Yes

Section 7B -- Licensing

76. Are there licensing requirements for auditors in your country?

Yes (continue with Question 77)

No (proceed to Section 8)

77. Who sets the requirements to obtain a license?

Government has gezetted under Company Law certain requirements to be a registered auditor.

14. The ICASL issues the practicing certificate only to its members, who fulfill the requirements to be eligible for practicing certificate. Only such Chartered accountants are entitled to carry out the audits of SBEs. However, such Chartered Accountants also have to be registered with the Registrar of Companies.

78. What are the requirements to obtain a license (please select all relevant requirements.)?

	Academic study specific for obtaining a license
	Practical experience
	Licensing examination
	Final qualifying examination
	Other (please describe)

79. Are there ongoing requirements to retain a license?

Yes

	Continuing professional development
	Re-examination
	Other (please specify):

80. What entity grants the license?

[1] Registrar of Companies
[2] The Institute of Chartered Accountants issues practice certificates - renewable annually

81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).

In terms of the Securities & Exchange Commisssion Act Regulations; and Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995, only Members of the Institute of Chartered Accountants of Sri Lanka, who have obtained the certificate to practice, can be auditor of listed entities, public or private with public interest, like banking and insurance entities.

Section 8 -- Public Sector Accounting Standards

Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

Section 8A -- Statutory Framework

82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.

Type of entity	Name of legal authority	Date of last amendment (e.g. MM/YYYY 06/2001)	Name of body responsible for setting public sector accounting standards
Whole of government
Ministry/department
Statutory authority/agency
Profit entity owned by government
State governments
Local governments
Other (please describe)
Other (please describe)

N/A

Yes

Section 9 -- Private Sector Accounting Standards

Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

Section 9A -- Statutory Framework

94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.

Type of entity	Name of legal authority or applicable rules	Date of last amendment (e.g. MM/YYYY 06/2001)	Name of body responsible for setting private sector accounting standards
Listed entity	Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995	8th August, 1995	Institute of Chartered Accountants of Sri Lanka
Other (please describe)	Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995	8th August, 1995	Institute of Chartered Accountants of Sri Lanka
Other (please describe)	Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995	8th August, 1995	Institute of Chartered Accountants of Sri Lanka
Other (please describe)	Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995	8th August, 1995	Institute of Chartered Accountants of Sri Lanka
Other (please describe)

On request hard copies can be sent

Yes

Section 9B -- Standard-Setting (Institute of Chartered Accountants of Sri Lanka)

95. For Institute of Chartered Accountants of Sri Lanka, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.

Established under Act of Parliament. Autonomous.

Sri Lanka Accounting Standards and Sri Lanka Auditing Standards

96. How many voting members does the standard-setting body have?

Council - 14 Members; Accounting Standards Committee - 12 members

97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?

	Voluntary
	Employed
	Both - Please describe:		While Council & Committee Members are voluntary, they are assisted by full-time Technical Staff

98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?

Best person for job, Sector respresentation, private & public members

99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?

Appointed by ICASL Council, Regulatory Bodies & User Groups in terms of Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995

100. What is the term of appointment for members?

4 Year(s)

101. For how many years has the standard-setting body been in existence?

8 Year(s)

102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:

Note: Please enter a whole number using commas (e.g., 4,000,000)

54,000

Please enter the exchange rate used to calculate this number.

Note: Please enter a decimal amount (e.g., 4.0027)

100.00

103. To what entity is the standard-setting body accountable?

To the Council of the Institute of Chartered Accountants of Sri Lanka

104. Describe the due process followed by the standard-setting body. Please include explanations of the following:

public exposure of standards

[1] Accounting & Auditing Standards Committees appointing Steering Committees
[2] Steering Committees recommending to Main-Committee
[3] Main Committee recommending to Council for adoption
[4] Each Standard is exposed to public for comments
accessibility of meetings (i.e., public or private)

Main Committee & Steering Committee Meetings are private. But round table discussions/seminars are held to public.
approval process for final standards (i.e., majority required to approve final standards)

Accounting Standards - 9 Members out of 12 must approve.
Auditing Standards - 5 Members out of 8 must approve.
other relevant due process activities

[1] Expert consultancy arranged, if need arises, on special areas
[2] IFAC & IASB Consulted

105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?

12 Day(s)

Section 10 -- Monitoring (Quality Assurance) and Enforcement

Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

Section 10A -- Securities Market Regulatory Authority

106. Name the authority that regulates the securities market:

Securities & Exchange Commission (SEC)

107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:

SEC requires listed companies to comply with Sri Lanka Accounting Standards. It monitors compliance too. Sri Lanka Accounting & Auditing Standards Monitoring Board (SLAASMB), under another Act, also monitors compliance

108. Briefly describe the role of the regulatory authority as it relates to the following:

regulation of the audit profession

Recently, a committee has been set up to examine how best SEC can regulate the profession. Sri Lanka Accounting and Auditing Standards Monitoring Board monitors compliance with the Auditing Standards
accounting and auditing standard-setting

Director General of SEC is an ex-officio member of the Accounting Standards Committee set up under the Sri Lanka Accounting & Auditing Standards Act No. 15 of 1995
review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

In addition to SEC reviewing the financial statements, Sri Lanka Accounting & Auditing Standards Monitoring Board, under the Sri Lanka Accounting & Aduting Standards Act, monitors compliance with Accounting & Auditing Stadards.

Section 10B -- Stock Exchange

109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:

Profit	Not for profit	Stock Exchange
		Colombo Stock Exchange

Section 10B -- Stock Exchange
Colombo Stock Exchange Details

110. For Colombo Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?

Yes

If YES, please describe the following:

How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

Colombo Stock Exchange monitor compliance with the continuing listing requirements which, among other things, includes compliance with the Sri Lanka Accounting and Auditing Standards
The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

Material non-compliance will result in investigation and penal action
How enforcement actions are administered.

Non-complying listed entities may be transferred to a default Board; suspension of trading securities for a period of time and delisting of such entities from official listing and imposing any other conditions as deemed fit by the Stock Exchange

Section 10C -- Regulatory Oversight of the Accounting Profession

111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?

Yes

If NO, proceed to the next section.

If YES, please describe :

What are the name and duties of the oversight body?

To monitor compliance with the Sri Lanka Accounting & Auditing Standards by Specified Business Enterprises
The number of members on the oversight body

10
Its powers

[1] To require Specified Business Enterprises to file annual accounts
[2] To require SBE's officers or auditors to furnish related information
[3] To summon and question any officer or auditor of SBE's
[4] To carry out investigations
How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

First compliance with Accounting Standards is checked. Material deviations from Accounting Standards will make the Board investigate in detail. Thereafter, compliance with the Auditing Standards by the auditors will also be assessed
The sanctions the oversight body may impose in the event of non-compliance

[1] Offender, on conviction after summary trial, be lilable to a fine not exceeding Rs. 500,000
[2] Where the offence is intentional to mislead shareholders, the Court may sentence the offender to imprisonment of a term not exceeding 5 years
How the oversight body is accountable to any public institution or body

The Board to publish its annual report and submits to the Minister for approval. Then the report shall be laid before a Parliament

Section 10D -- Banks Regulatory Authority

112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:

[1] Central Bank exercises supervisory functions through Bank Supervision Department [2] One Central Bank nominee sits on the Statutory Accounting Standards Committee [3] Accounting Standards affecting Banks need concurrence of Central Bank [4] Banks have to file returns with Central Bank under Banking act

113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:

[1] The Central Bank exercises supervisory functions [2] The Central Bank nominates Bank Auditors [3] SEC exercise supervision over Banks [4] The Sri Lanka Accounting & Auditing Standards Monitoring Baord to monitor Bank Compliance with the Accounting & Auditing Standards

114. Briefly describe the role of the regulatory authority as it relates to the following:

regulation of the audit profession

[1] The SEC while supervising the listed Banks, overseas the audit profession [2] The Sri Lanka Accounting & Auditing Standards Monitoring Board monitors compliance with Auditing Standards by banks
accounting and auditing standard-setting

[1] the Accounting & Auditing Stadnards Act empowers the Institue of Chartered Accountants of Sri Lanka to promulgate the Standards [2] Nominees of Central Bank, SEC, Registrar of Companies sit on the Accounting Standards Committee
review of financial statements prepared by listed entities

Reviewed by Colombo Stock Exhcange, SEC & SLAASMB
enforcement of accounting, reporting and auditing requirements

[1] Central Bank [2] SLAASMB [3] SEC

Section 10E -- Non-Banking Financial Institutions Regulatory Authority

115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.

[1] Central Bank [2] SEC [3] SLAASMB

116. What is the source of Legal authority of the regulatory authority(ies)?

[1] Banking Act [2] SEC Act [3] SLAASMB Act [4] Finance Companies Act

117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:

regulation of the audit profession

[1] The SEC while supervising listed institutions, overseas audit functions [2] The Sri Lanka Accounting & Auditing Standards Monitoring Board to monitor compliance with Accounting & Auditing Standards by Financial Institutions.
accounting and auditing standard-setting

[1] The Accounting & Auditing Standards Act empowers the Institute of Chartered Accountants of Sri Lanka to promulgate the Standards [2] Nominees of Central Bank, Registrar of Companies and SEC sit in Accounting Standrds Committee.
review of financial statements prepared by listed entities

Reviewed by [1]Colombo Stock Exchange [2] SEC [3] SLAASMB
enforcement of accounting, reporting and auditing requirements

[1] Central Bank [2] SLAASMB [3] SEC

Section 10F -- Insurance Companies Regulatory Authority

118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.

[1] Insurance Board of Sri Lanka [2] SEC [3] SLAASMB

119. What is the source of Legal authority of the regulatory authority(ies)?

(1) Regulation of Insurance Industry Act [2] SEC Act [3] Sri Lanka Accounting & Auditing Standards Act

120. Briefly describe the role of the regulatory authority(ies) as it relates to the following

regulation of the audit profession

(1) The Insurance Board (2) The SLAASMB to monitor compliance with accounting and auditing standards (3) SEC
accounting and auditing standard-setting

(1) The SLAASMB empowers the Institute of Chartered Accountants of Sri Lanka to promulgate standards (2) Nominees of Registrar of Companies and SEC sit on Accounting Standards Committee
review of financial statements prepared by listed listed entities

Reviewed by (1) Colombo Stock Exchange (2) Insurance Board of Sri Lanka (3) SLAASMB
enforcement of accounting, reporting and auditing requirements

(1) Insurance Board of Sri Lanka (2) SLAASMB

Section 10G -- Other Regulatory Authority

121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.

N/A

122. What is the source of Legal authority of each regulatory authority?

N/A

123. Briefly describe the role of the regulatory authority(ies) as it relates to the following

regulation of the audit profession

N/A
accounting and auditing standard-setting

N/A
review of financial statements prepared by listed listed entities

N/A
enforcement of accounting, reporting and auditing requirements

N/A

Section 10H -- Quality Assurance

124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?

Yes

If NO, proceed to next Section.

If YES, briefly describe the monitoring and enforcement mechanism.

Practice Review Programme is being reviewed. Implementation is proposed for some time during this year (2005).

125. Under what authority does the organization conduct the program of quality assurance review?

Initially on voluntary basis. As time goes, to be made mandatory under Institute's enabling Act

126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?

Initially one firm reviewing another firm

Section 10 I -- Investigation and Discipline

127. Is there a process for investigating and disciplining the accounting profession in your country?

Yes

If NO, proceed to the Certification of Chief Executive

128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?

	Government or other agencies are solely responsible for this function.
	Government or other agencies have this responsibility, but the member body or bodies participate in the process.
	Government formally delegates this function to the member body or bodies, to exercise on its behalf.
	Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
	Other (please explain)

129. Please indicate the name of the body or bodies responsible for investigation and discipline.

(1) SLAASMB
(2) The Ethics Committee of the Institute of Chartered Accountants of Sri Lanka

Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

130. How many voting members does the body have?

(1) 10 & (2) 10

131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?

	Voluntary
	Employed
	Both - Please describe:		Members of SLAASM and Members of the Ethics Committee are assisted by the technical staff of full time employment

132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?

133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?

134. What is the term of appointment for members?

Year(s)

135. For how many years has the body been in existence?

Year(s)

136. Please indicate the budget in US$ of the body for the last fiscal year.

Note: Please enter a whole number using commas (e.g., 4,000,000)

Please enter the exchange rate used to calculate this number.

Note: Please enter a decimal amount (e.g., 4.0027)

(specify currency)

137. To what entity is the body accountable?

138. Approximately how many days per year does the body meet in full session (including teleconferences)?

Day(s)

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