Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB)

1. Sri Lanka Accounting and Auditing Standards Monitoring Board(SLAASMB)

2. SLAS SLAS Duties of Specified Business Enterprises (SBEs) • Prepare its financial statements in compliance with Sri Lanka Accounting Standards. SLAS ? SLAS ? SLAS ? SLAS ? SLAS @ SLAS # SLAS ??? SLAS ? SLAS $ SLAS ? SLAS ? SLAS ? SLAS ?

3. Duties of Specified Business Enterprises (SBEs) • Take all necessary measures to ensure that the financial statements are audited in accordance with Sri Lanka Auditing Standards with the object of presenting a true and fair view of the financial performance and financial position of such enterprise.

4. B.Sc. ACA Duties of Specified Business Enterprises (SBEs) • To have the financial statements audited by members of the Institute of Chartered Accountants of Sri Lanka holding a certificate to practice, issued by the Institute.

5. AFMA Ltd. Annual Report 2008/09 Duties of SBEs • Submit a copy of the annual financial statements of the enterprise to the SLAASMB, to enable the Board to determine whether the financial statements have been prepared in compliance with Sri Lanka Accounting Standards, and

6. Duties of SBEs To furnish to the Board or to any person authorized by the Board any information pertaining to its financial statements as may be required by the Board or any person authorized by the Board within such time, as may be specified in a notice issued by the Board or any person authorized by it.

7. B.Sc. ACA Duties of Auditors • The financial statements of every specified business enterprise shall be audited by a member of the Institute of Chartered Accountants of Sri Lanka holding a certificate to practice issued by the institute.

8. True & Fair Duties of Auditors • The Act requires the auditors to certify in their audit report that the audit has been conducted in accordance with Sri Lanka Auditing Standards and that the financial statements have been prepared and presented in accordance with Sri Lanka Accounting Standards.

9. Duties of Auditors • Where any Qualified Auditor fails to comply with the Sri Lanka Accounting Standards and the Sri Lanka Auditing Standards as required by the Act, he shall specify clearly, - the deviation made - reasons for such deviations SLAS

10. The Sri Lanka Accounting and Auditing Standards Monitoring Board(SLAASMB) • The Sri Lanka Accounting and Auditing Standards Monitoring Board was established by the Act No.15 of 1995.

11. Functions of the Board To monitor the compliance with the Sri Lanka Accounting and Auditing Standards by the Specified Business Enterprises Monitor SLAuS SLAS

12. The Sri Lanka Accounting and Auditing Standards Monitoring Board(SLAASMB) • All members of the Board are either ex-officio members by virtue of the holding of a specified public office, or are members appointed out of persons nominated by specified institutions.

13. 1. Registrar of Companies; 3 Director General of the SEC of Sri Lanka CIR CIR DSEC ROC The SLAASMB consists of the following members • Three members ("ex officio members") who shall be the persons holding office as 2 Commissioner General of Inland Revenue

14. The SLAASMB consists following members Ten members appointed by the Minister ("appointed members") 1. An officer of the Central Bank nominated by the Governor of the Central Bank. 2. Three members of the Institute selected from among persons nominated by the Institute.3. A member of the Chartered Institute of Management Accountants of the United Kingdom selected from among three members nominated by the Sri Lanka Division of the Institute.

15. The SLAASMB consists of the following members 4. One senior lawyer selected from among three senior lawyers nominated by the Bar Association of Sri Lanka.5. Two experienced company directors from SBEs (one of whom shall be selected from a panel of three names submitted by the Ceylon Chamber of Commerce, and the other from a panel of three names submitted by the Federation of Chambers of Commerce and Industry of Sri Lanka.)6. One Senior Banker selected from a panel of three bankers nominated by the Sri Lanka Banks’ Association 7. One person selected from a panel of three persons nominated by the University Grants Commission.

16. Investigative Powers of the SLAASB The Board or any person duly authorized by the Board may: 1. By notice in writing require a SBEs or its auditors to furnish to the Board or to a person authorized by the Board any information pertaining to its financial statements and it shall be the duty of such SBES or its auditors to comply with such requirement within the time specified in the notice. (Above notice has to be issued not later than one year after the specified business enterprises has submitted the relevant financial statements to the Board. There is no time limit to exercise the other powers.)

17. Investigative Powers of the SLAASB The Board or any person duly authorized by the Board may: • 2. To summon and question any director, officer or auditor of any specified business enterprise on any matter pertaining to the preparation or presentation of its financial statements

18. Investigative Powers of the SLAASMB The Board or any person duly authorized by the Board may: 3. Carry out investigations or hold inquiries of any director, officer or auditor of any SBEs to appear before the board at any such investigation or inquiry or to produce any books or documents in the possession or control of such director, officer or auditor as are required for the purpose of such investigation or inquiry.

19. Board’s Consideration of Public Complaints • The Board would welcome public complaints. However, the Board would act with care and caution to ensure that SBE are not unduly harassed due to frivolous complaints.

20. Board’s Consideration on Media Comments • The Board would peruse information published in the media with a view to detect a need to carryout an investigation. Here too, the Board would act with caution to ensure that SBEs are not unduly harassed.

21. Offences 1. Every a. Persons who fails to Prepare its Accounts in accordance with SLAS and take all necessary measures to audit those accounts in compliance with SLAuS,(non compliance with Sec. 6 & 7),…. b. Who fails to submit information or non producing of documents requested by the board during an investigation or knowingly furnishes any false information,…..

22. Fine Offences c. Director, Officer of Auditor of a SBE who fails to appear before the SLAASMB when required to do so or who refuses to answer any question put him by the Board or refuse to produce any book or document in his possession or knowingly give false information,….. Shall be Guilty of an Offence under this Act After summary trial before a Magistrate be liable to a not ExceedingRs. 500,000

23. Imprisonment Not exceeding Five Years Offences Where a person is convicted of an offence under this Act and the court holds that the offence was done with the intension of misleading shareholders (Bank-depositors) court may sentence the offender to,

24. Offences Where an offence is committed by a body corporate, A director, Manager, Secretary or other similar officer of that body corporate shall be deemed to be guilty of that offence (unless he proves the offence was committed by the firm without his knowledge) I Don’t know

25. Compounding of Offences The board may, having regard to the nature of the offence, compound such offence for a sum of money not exceeding one third of the fine imposable for such offence

26. Contravenes to the Act that are not Serious Nature a. Direct such SBEs to have their accounts re-audited or where such accounts have been published, to republish them or to include suitable corrections in its accounts for the following year. AFMA Company 2009 Financial Statements

27. Contravenes to the Act that are not Serious Nature b.Where such SBE is a public company direct it to send notification in writing to all its shareholders explaining the reason for such noncompliance and the financial effect of such noncompliance on the accounts Non compliance

28. Contravenes to the Act that are not Serious Nature c.Where such SBE is a public company listed in the Colombo Stock Exchange (licensed by SECSL) to send in addition a copy of notification to such Commission and suck Stock Exchange.

29. Board to inform Professional Institutes of any Violation Where any accountant of any SBE violates any provision of this Act, it shall be the duty of the board to bring such violation to the notice of any professional body of which such accountant is a member for the purpose of enabling such body to take appropriate action against such accountant aat

30. Is your club listed here ?Contact us to create yourSports Club News & Eventspage here Is your club listed here ?Contact us to create yourSports Club News & Eventspage here Board to inform regulatory authority and Inland Revenue Department Where any SBE has failed to comply with the provision of this Act, it shall be the duty of the board to bring such violation to the notice, of any authority which is empowered by law to regulate or supervise the activites of such SBE of the Inland Revenue Department if the board considers that such noncompliance has resulted in a substatntial reduction of thhe tax liability of such SBE

31. Practical Cases The Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) acting under the Sri Lanka Accounting and Auditing Standards Act No 15 of 1995 last week decided to release to the public regarding significant cases detected during the 2004.The significant cases detected in year 2004 are as follows.1. Senkadagala Finance Company Limited The Board issued a direction to Senkadagala Finance Company Limited to send a notification to all parties who received the annual audited financial statements explaining a related party transaction that was not adequately disclosed in their financial staements.-

32. Practical Cases 2. W. M. Mendis & Company LimitedW. M. Mendis & Company Limited had not issued consolidated financial statements for the year ended 31st March 2003, consolidating the financial statements of Mendis Carbon (Pvt) Limited which became a subsidiary during the year. The auditors have not qualified their report in this respect. Users of the financial statements of a parent of a group of companies need to be informed about the financial position, results of operations and changes in financial position of the group as a whole. This need is served by consolidated financial statements. Company agreed to consolidate the financial statements of Mendis Carbon (Pvt) Ltd and to issue consolidated financial statements of W. M. Mendis & Company Limited for the year ended 31st March 2004.

33. Practical Cases Exam type Question ABC Limited a Public Quoted Company which is listed in the Colombo Stock Exchange has failed to comply with certain accounting standards. The Board of Directors are of the view that the contravention with the Sri Lanka Accounting and Auditing Standards Act No. of 1995 is not of a serious nature. Advise the directors as to what action SLAASMB may take in this situation