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Diagnostic Study of Accounting and Auditing Practices in Sri Lanka

E-mail or fax the Publications Unit at + 632 636 2648 to order copies of this document. Applicable shipping cost will be charged. View Document  Books, Periodicals, Studies, and Reports On-line edition: Free of Charge Hardcopy price: $10.00 ISBN: 971-561-466-3 Pub. Date: 2002 In stock

This report describes accounting and auditing arrangements in Sri Lanka, identifies deficiencies in those arrangements, and presents recommendations to address those deficiencies.

Although Sri Lanka had reasonable financial management arrangements before the finance company crisis, as a consequence of the subsequent corrective improvements, these arrangements now compare very well with those of other countries, at least for the private sector.

In contrast, public corporation financial governance practices are poor, as are other public sector accounting arrangements. In the case of public corporations, the study makes several recommendations to strengthen governance.

SEE ALSO

Diagnostic Study of Accounting and Auditing Practices Series Financial Management and Governance Issues Series

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Contents

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Foreword, Contents, and Executive Summary [ PDF: 279kb | 18 pages ]

1. Introduction [ PDF: 221kb | 10 pages ]
   1. Study Background
   2. Objectives
   3. Scope
   4. Country Case Studies and Workshop
   5. Sri Lanka
   6. ADB Focus on Financial Governance in Sri Lanka
   7. International Guidelines and Surveillance
   8. Report Structure

2. Accounting and Auditing in Sri Lanka [ PDF: 258kb | 22 pages ]
   Part One. Accounting
   
   1. Introduction
   2. The ‘Sri Lankan Accounting System’
   3. Financial Reporting and Disclosure Requirements
   4. Quality of Sri Lankan Financial Reporting and Disclosure
   Part Two. Auditing
   
   1. Introduction
   2. Auditor Appointment and Dismissal
   3. Auditor Independence
   4. Audit Reporting Requirements
   5. Auditor Liability
   6. Accounting and Auditing Firms
   7. Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB)
   8. Financial Aspects of Sri Lankan Corporate Governance
   9. Issue Synopsis: Accounting and Auditing Arrangements

3. Professional Infrastructure [ PDF: 199kb | 10 pages ]
   1. Introduction
   2. Professional Regulation and Organization
   3. Institute of Chartered Accountants of Sri Lanka (ICASL)
   4. The Chartered Accountant Designation
   5. Other Sri Lankan Accountancy Bodies
   6. Foreign Accountancy Bodies
   7. Quality Control and Assurance
   8. Issue Synopsis: Professional Infrastructure

4. Accounting and Auditing Standards [ PDF: 273kb | 17 pages ]

   Part One. Accounting Standards

   1. Introduction
   2. Accounting Standards Committee (ASC)
   3. Accounting Standard Setting Process
   4. Sri Lankan Accounting Standards (SLASs)
   5. Conformity with International Accounting Standards (IAS)
   6. Public Sector Accounting Standards
   7. Taxation Reporting Requirements

   Part Two. Auditing Standards

   1. Introduction
   2. Auditing Standards Committee (AuSC)
   3. Auditing Standard Setting Process
   4. Sri Lankan Auditing Standards
   5. Comparison with International Standards on Auditing (ISA)
   6. Issue Synopsis: Accounting and Auditing Standards

5. Accounting and Auditing Training [ PDF: 154kb | 7 pages ]
   1. Introduction
   2. International Standards and Guidance on Accountancy Education
   3. Educational Coordination
   4. Higher Education Institutions
   5. Sri Lanka Institute of Development Studies (SLIDA)
   6. The Institute of Government Accounts and Finance (InGAF)
   7. Training by Professional Bodies
   8. Issue Synopsis: Accounting and Auditing Training

6. Government Budgeting and Accounting [ PDF: 169kb | 9 pages ]
   1. Introduction
   2. Legal Framework for Government Budgeting, Accounting and Auditing
   3. Organizational Roles and Responsibilities
   4. Budgeting, Accounting and Reporting Arrangements
   5. Accounting Information Systems
   6. Auditor-General’s Department
   7. Government Accounting Personnel
   8. Fiscal Devolution to Provincial Councils
   9. Issue Synopsis: Government Budgeting and Accounting

7. Donor Assistance [ PDF: 158kb | 6 pages ]
   1. Overview
   2. Coordination Mechanisms
   3. Asian Development Bank (ADB)
   4. International Monetary Fund (IMF)
   5. World Bank
   6. United Nations Development Programme (UNDP)
   7. Canada (CIDA)
   8. Japan
   9. Taipei, China
   10. United States (USAID)

8. Issues and Recommendations [ PDF: 134kb | 7 pages ]

   Part One. Where Donor Assistance Might be Appropriate

   1. Strengthen Government Accounting and Auditing
   2. Strengthen Public Corporation Accountability through Legislative Amendments
   3. Appoint Accountants to Public Corporation Boards
   4. Strengthen Public Corporation Internal Auditing and Controls
   5. Publish a Scorecard of Public Corporation Reporting

   Part Two. Where External Assistance is Not Required

   1. Create Chief Financial Officer Positions in Public Corporations
   2. Require SLAASMB Review of all Public Corporation Annual Reports
   3. Enhance Director Accountability
   4. Close the Emerging Gaps Between SLASs and IASs
   5. Enhance Auditor Independence and Objectivity
   6. Make CPE Mandatory for Continuing ICASL Membership
   7. Enhance Institutional Support for Financial Governance
   8. Provide Resources to ICASL for Standing-Setting
   9. Advocate Changes to IASB Copyright and Pricing
   10. Encourage the Development of Financial Reporting Standards for SMEs

9. Main Deficiencies and Action Plan [ PDF: 89kb | 2 pages ]

References and Appendixes [ PDF: 408kb | 55 pages ]