Sri Lanka regulator expects auditors to follow whistleblowing rule

ECONOMYNEXT – The head of Sri Lanka’s capital markets regulator said he expects local audit firms to comply with internationally accepted ‘whistleblowing’ requirements to report financial irregularities.
 
Full, timely, and accurate disclosure of financial results and other information that is material to investor decisions is required to ensure that markets are fair and transparent, said Thilak Karunaratne, Chairman of Securities & Exchange Commission (SEC)of Sri Lanka.

“Therefore, to further enhance auditor oversight, the SEC is exploring the possibility of placing a legal audit duty on whistleblowing to report any irregular or improper conduct by the regulates,” he said.

“As this process is accepted by all the major audit firms I sincerely hope that their local associates will also fall in line.”

Karunaratne spoke at the launch of the ‘Preparer’s Guide on Integrated Corporate Reporting’ by the Institute of Chartered Accountants of Sri Lanka.

He said that the SEC, which embraces a disclosure based regime, strives to inculcate a culture of corporate governance by ensuring that the market is fair, transparent and safe.

SEC’s overarching mandate is intended to promote full and timely disclosure of material information, he said.

“A strong disclosure regime can help to attract capital and maintain confidence in the capital markets,” Karunaratne said.

“By contrast, weak disclosure and non-transparent practices can contribute to unethical behaviour and to a loss of market integrity at great cost, not just to the company and its shareholders but also to the economy as a whole.”

(Colombo/July 27 2015)
 

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