Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    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:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. 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   No


    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   No
      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   No
      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   No
      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:
    1. 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

    2. 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

    3. 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   No


    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   No
      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   No
      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   No
      If YES, please indicate the term of appointment: 1 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      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)

      a. How can IFAC obtain copies of these documents?

      On request hard copies can be sent

      b. Are the documents available in English?
      Yes   No


    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.
      a. Nature of body

      Established by Act of Parliament, Autonomous

      b. Name of standards

      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:
    1. 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.


    2. accessibility of meetings (i.e., public or private)

      Committee meetings are private, but public meetings are held if need arises.

    3. 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.


    4. 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)

      a. How can IFAC obtain copies of these documents?

      On request, hard copies can be sent.

      b. Are the documents available in English?
      Yes   No


    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.
      a. Nature of body

      Autonomous

      b. Name of standards



    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)

      00

      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:
    1. public exposure of standards

      [1] Based on the IFAC Standards after Due Review Process
      [2] Exposed to all members for comments


    2. accessibility of meetings (i.e., public or private)

      Meetings of Ethics Committee and Council are private. Public Meetings are held, if necessary.

    3. approval process for final standards (i.e., majority required to approve final standards)

      Unanimous approval is sought

    4. 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   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      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.
      Education Committee of the Institute of Chartered Accountants of Sri Lanka

    1. 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

    2. 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

    3. 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

    4. 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   No


    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   No



    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   No

      If YES, please select all relevant requirements.
      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)

      a. How can IFAC obtain copies of these documents?

      N/A

      b. Are the documents available in English?
      Yes   No



    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)

      a. How can IFAC obtain copies of these documents?

      On request hard copies can be sent

      b. Are the documents available in English?
      Yes   No


    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.
      a. Nature of body

      Established under Act of Parliament. Autonomous.

      b. Name of standards

      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:
    1. 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


    2. accessibility of meetings (i.e., public or private)

      Main Committee & Steering Committee Meetings are private. But round table discussions/seminars are held to public.

    3. 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.


    4. 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:
    1. 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

    2. 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

    3. 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   No

      If YES, please describe the following:

    1. 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

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      Material non-compliance will result in investigation and penal action

    3. 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   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      To monitor compliance with the Sri Lanka Accounting & Auditing Standards by Specified Business Enterprises

    2. The number of members on the oversight body

      10

    3. 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


    4. 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

    5. 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


    6. 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:
    1. 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

    2. 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

    3. review of financial statements prepared by listed entities

      Reviewed by Colombo Stock Exhcange, SEC & SLAASMB

    4. 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:
    1. 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.

    2. 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.

    3. review of financial statements prepared by listed entities

      Reviewed by [1]Colombo Stock Exchange [2] SEC [3] SLAASMB

    4. 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
    1. regulation of the audit profession

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

    2. 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

    3. review of financial statements prepared by listed listed entities

      Reviewed by (1) Colombo Stock Exchange (2) Insurance Board of Sri Lanka (3) SLAASMB

    4. 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
    1. regulation of the audit profession

      N/A

    2. accounting and auditing standard-setting

      N/A

    3. review of financial statements prepared by listed listed entities

      N/A

    4. 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   No

      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?

    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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