ECONOMYNEXT – The global standard setter for securities regulation has drawn attention to concerns over the dominance by auditors of Sri Lanka’s regulator of accounting and auditing standards.
The Board of the International Organization of Securities Commissions (IOSCO) said Sri Lanka has a formal system of supervising and enforcing compliance with accounting standards.
Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) is responsible for the supervision and enforcement of the standards.
“However, there are a number of shortcomings including the approach to compliance with accounting standards,” the IOSCO noted in its latest country review.
“There are also concerns about the dominance of members of the profession on the SLAASMB Board.”
The review noted advice from the Institute of Chartered Accountants of Sri Lanka that amendments are proposed to the auditing standards law to establish a Quality Assurance Board to strengthen the auditing profession.
IOSCO said there was limited interaction between the Securities and Exchange Commission (SEC) and SLAASMB in monitoring compliance.
SLAASMB has limited remediation and enforcement powers, and faces resourcing issues, IOSCO also said.
The relatively large number of registered auditors not subject to the requirements of the auditing standards Act is also a matter of concern, it said.
(COLOMBO, July 14, 2017)