Sri Lanka stands high in financial reporting, compared with the other countries in the region.
Sri Lanka is one of the 32 countries in the International Forum of Independent Audit Regulators and Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) is the Regulator situated in the South Asian region. Hence, the quality of financial reporting stands high in the region Sri Lanka Accounting and Auditing Standards Monitoring Board Director General, Ajith S. Ratnayake to Daily News Business, said.
Small and Medium Enterprises of Sri Lanka have to comply with the Sri Lanka Accounting Standards for Smaller Enterprises (SLASSE) whereas companies listed in Colombo Stock Exchange and Specified Business Enterprises comply with Sri Lanka Accounting and Auditing Standards. Hence, each company in Sri Lanka is monitored by rules when considering the need of valuable information to the public on their financial reports, he said.
At present, the SME sector in Sri Lanka has shown an interest in financial reporting. A proper financial and auditing report assesses the threats and improvements it can adopt and financial and auditing reports improve the financial systems in the enterprises.
Ratnayake said the International Accounting Standards Board (IASB) published an International financial Reporting Standards code (IFRS) that was revised by the Sri Lanka Accounting Standards Committee.
The standards will be recommended for adoption through a council of the Institute of Chartered Accountants of Sri Lanka (ICASL). The adoptions will be published and inducted to the legal system by Gazette.
He said companies should adopt the corporate governance concept to avoid giving misleading information to the public. Two ways the companies should comply with it are the performance and compliances. The performance of the company ensures whether it had functioned properly and under compliance it ensures whether the company complies with the law of the country.
Commenting on the Sri Lanka Accounting Standards for Smaller Enterprises (SLASSE) for SMEs, he said this was adopted since 2003 and there will be new development in the standards in coming months.
Sri Lanka has been adopting the 2007 version of the International Financial Reporting Standards (IFRS), whereas Sri Lanka should adopt the latest standards. The SLASSE is in the process of adopting the latest standards of Financial and Auditing reports.