Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995

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Sri Lanka Accounting and Auditing Standards Act
No. 15 of 1995
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International Accounting Standards (IAS) Setting
Process

• The Council of the Institute of Chartered
  Accountants Sri Lanka (ICASL) has adopted the
  rule that the Sri Lanka Accounting Standards
  (SLAS) to be set in line with IAS.

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International Accounting Standards (IAS) Setting
Process

• International Accounting Standards (IAS) are
  adopted by the International Accounting Standards
  Committee (IASC)

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International Accounting Standards Committee
(IASC)

• An independent private sector body
• objective is to achieve uniformity in the
  accounting principles which are used by
  businesses and other organizations for financial
  reporting around the world.

• formed in 1973 through an agreement made by
  professional accountancy bodies from

Ireland
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International Accounting Standards Committee
(IASC)

• Since 1983, IASCs members have included all the
  professional accountancy bodies that are members
  of the International Federation of Accountants
  (IFAC).
• Many other organizations are now involved in the
  work of IASC and many countries that are not
  members of IASC make use of International
  Accounting Standards.

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International Accounting Standards (IAS) Setting
Process

• The Board sets up a Steering Committee. Each
  Steering Committee is chaired by a Board
  Representative and usually includes
  representatives of the accountancy bodies in at
  least three other countries.
• The Steering Committee identifies and reviews
  all the accounting issues associated with the
  topic. The Steering Committee considers the
  application of IASCs Framework for the
  Preparation and Presentation of Financial
  Statements to those accounting issues.

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International Accounting Standards (IAS) Setting
Process

• Having considered the issues involved, the
  Steering Committee may submit a Point Outline to
  the Board.
• After receiving comments from the Board on the
  Point Outline, if any, the Steering Committee
  normally prepares and publishes a Draft Statement
  of Principles or other discussion document
• Comments are invited from all interested parties
  during the exposure period, usually around three
  months.

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International Accounting Standards (IAS) Setting
Process

• The Steering Committee reviews the comments on
  the Draft Statement of Principles and normally
  agrees a Final Statement of Principles, which is
  submitted to the Board for approval and used as
  the basis for preparing an Exposure Draft of a
  proposed International Accounting Standard.
• The Steering Committee prepares a Exposure Draft
  for approval by the Board. After revision, and
  with the approval of at least two-thirds of the
  Board, the Exposure Draft is published. Comments
  are invited from all interested parties during
  the exposure period, a minimum of one month, and
  usually at least three months.

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International Accounting Standards (IAS) Setting
Process

• The Steering Committee reviews the comments and
  prepares a draft International Accounting
  Standard for review by the Board. After revision,
  and with approval of at least 3/4 of the Board,
  the Standard is published.

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Accounting Standards Setting Process in Sri Lanka

• Sri Lanka Accounting and Auditing Standards Act
  No.15 of 1995 (SLAAS 1995) empowers the Institute
  of Chartered Accountants of Sri Lanka to adopt
  Sri Lanka Accounting Standards and Sri Lanka
  Auditing Standards

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Accounting Standards Setting Process in Sri Lanka

• SLAAS-1995 brought into existence a committee
  known as Accounting Standards Committee to make
  recommendations or otherwise assists ICASL in the
  adoption of SLAS

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Accounting Standards Setting Process in Sri Lanka

• Accounting Standard Committee shall consists of
• The President of the ICASL
• Five members of ICASL nominated by the Council
• One member representing CIMA Sri Lanka Division
• The Registrar of Companies.
• The Director General of the CSE
• One member to represent the Central Bank of SL
• One member nominated by the Cey.Cha.Com
• One member nominated by the Federation of
  Chambers of Commerce and Industry of Sri Lanka.

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Accounting Standards Setting Process in Sri Lanka

• Accounting Standards Committee has decided to
  keep Sri Lanka Accounting Standards in line with
  International Accounting Standards
• International Accounting Standards adopted by
  the IASC are studied by the Accounting Standards
  Committee with a view to adopting them as Sri
  Lanka Accounting Standards

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Accounting Standards Setting Process in Sri Lanka

• The due process followed by the Accounting
  Standards Committee in the adoption of SLAS
• A sub committee is appointed to study the IAS,
  with a view to adopt it as a SLAS. The
  sub- committee is chaired by a member of the
  Accounting Standards Committee
• The IAS is sent to parties identified by the
  Accounting Standards Committee as those
  primarily interested in SLAS, calling for
  comments

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Accounting Standards Setting Process in Sri Lanka

• The due process followed by the Accounting
  Standards Committee in the adoption of SLAS
• The sub committee studies the IAS with a view to
  adopt it as a SLAS, taking into account any
  comments received from other parties.
• A draft SLAS is prepared by the sub-committee
  with necessary modifications, and presented to
  the Accounting Standards Committee.

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Accounting Standards Setting Process in Sri Lanka

• The due process followed by the Accounting
  Standards Committee in the adoption of SLAS
• A public seminar is held by the Accounting
  Standards Committee, to explain the proposed
  SLAS, and to obtain further comments from the
  public
• The sub committee reviews the draft SLAS based
  on the comments made at the public seminar, and
  recommends to the SLAS for adoption to the
  Accounting Standards Committee.

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Accounting Standards Setting Process in Sri Lanka

• The due process followed by the Accounting
  Standards Committee in the adoption of SLAS
• The Accounting Standards Committee discusses the
  proposed standard with the chairman of the sub
  committee and decides on the final standard to be
  recommended to the council for adoption.

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Auditing Standards Setting Process in Sri Lanka

SLAAS-1995 brought into existence a committee
known as Auditing Standards Committee to make
recommendations or otherwise assists ICASL in the
adoption of SLAuS
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Auditing Standards Setting Process in Sri Lanka

• Auditing Standard Committee shall consists of
  eight members of the institute nominated by the
  council of the ICASL
• At least four of them shall be members of the
  Accounting Standards Committee

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Accounting Standards Setting Process in Sri Lanka

• The due process followed by the Auditing
  Standards Committee in the adoption of SLAuS
• Auditing Standards Committee has decided to keep
  Sri Lanka Auditing Standards in line with
  International Standards on Auditing issued by the
  International Auditing Practicing Committee
  (IAPC) of the International Federation of
  Accountants
• Adoption of SLAuS follows a similar process as
  for the adoption of SLAS. Sri Lanka Auditing
  Standards are based on International Standards on
  Auditing (ISA) published by the IAPC

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Sri Lanka Accounting and Auditing Standards Act
No. 15 of 1995
Application of SLAS and SLAuS As per Section 2
and Section 3 of the Sri Lanka Accounting and
Auditing Standards Act No. 15 of 1995 SLAS and
SLAuS adopted by the council of ICASL shall be
applicable to all business enterprises given
below (SBE). Listed companies Unit Trusts
Banks Leasing companies Insurance
companies Stock Markets Sock Dealers Public
Corporations All other companies which exceeds
prescribed limites Turnover exceeding 500m
Liabilities 100m Assets value
300m Equity 100m Employees over
1000

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Sri Lanka Accounting and Auditing Standards Act
No. 15 of 1995
Duty to comply with SLAS and SLAuS Duty of every
SBE to prepare its accounts in compliance with
the Sri Lanka Accounting Standards and take all
necessary measures to ensure that its accounts
are audited in accordance with Sri Lanka Auditing
Standards Auditing of SBE to be done by
Qualified Auditors Accounts of every SBE shall be
audited by professionally qualified auditors who
shall be members of the Institute holding a
certificate to practice.