2015年-世界发展银行全球_Sri_Lanka_Report_on_the_Observance_of_Standards_and_Codes___Accounting_and_Auditing_Update_44页_48mb

Summary of the ROSC A&A Report: Sri Lanka - June 2015

Core Content

The Report on the Observance of Standards and Codes (ROSC A&A) for Sri Lanka, published in June 2015, evaluates the progress made since the first ROSC A&A in 2004 and identifies reforms necessary to strengthen the accountancy profession in the country. The report emphasizes the need for the profession to play a proactive role in enhancing financial reporting practices to align with global standards and support Sri Lanka's economic development goals.

Main Objectives

• To assess the implementation of policy recommendations from the 2004 ROSC A&A.
• To identify gaps and weaknesses in the current institutional framework for accounting and auditing.
• To provide a foundation for a comprehensive reform action plan to improve the quality of corporate financial reporting.

Key Findings

• Sri Lanka has transitioned to middle-income country status following the end of a 26-year conflict in 2009.
• The country aspires to become an upper middle-income economy by 2016.
• The accountancy profession is a significant contributor to the skills sector, with over 100,000 students.
• The finance and accounting outsourcing industry has grown due to the availability of skilled professionals and convergence with IFRS.
• The report highlights the importance of financial reporting in attracting foreign direct investment (FDI) and fostering business development.
• SMEs are perceived to lack credibility in financial reporting, which affects their access to capital and tax revenues.
• State-owned enterprises (SOEs) have a significant asset base, making improved financial reporting essential for better governance and economic performance.
• The current statutory framework has limitations, including the lack of clear categorization of companies, insufficient audit regulation, and no provisions for audit firm licensing.

Main Recommendations

Institutional Framework

• The Institute of Chartered Accountants of Sri Lanka (CASL) is the largest and most influential professional accountancy organization in the country, with over one-third of members and students.
• CASL is a member of IFAC and has also established partnerships with other international bodies such as the International Accounting Education Standards Board (IAESB) and the International Auditing and Assurance Standards Board (IAASB).
• CASL has published Sri Lanka Public Sector Accounting Standards (SLPSAS) in collaboration with the Ministry of Finance.
• The Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) is the only audit regulator in South Asia represented on the International Forum of Independent Audit Regulators (IFIAR) and is recognized for its model of combining audit and accounting reviews.

Economic Context

• Sri Lanka's GDP was estimated at US$67.4 billion in 2013, reflecting a 7.2% growth compared to 2012, slightly below the required 8% growth to reach the US$100 billion economy by 2016.
• The Colombo Stock Exchange (CSE) has 291 listed companies, with a market capitalization of LKR 2,499.8 billion (approximately US$18.8 billion), representing about 28% of GDP.
• The financial services sector includes 24 licensed commercial banks, 9 specialized banks, 48 finance companies, 10 leasing companies, and 22 insurance companies.
• The accountancy profession plays a key role in supporting the knowledge-based economy and business development.

Challenges and Opportunities

• Challenges:
  • The statutory framework lacks clear categorization of companies and does not enforce differential reporting requirements.
  • Registered auditors are allowed to audit non-SBEs despite not being professional auditors.
  • There are no provisions for licensing audit firms, only individual auditors.
  • The SLAASMB lacks additional funding sources.
  • SMEs and SMPs lack the capacity to follow international standards.
• Opportunities:
  • Strengthening the institutional framework and regulatory coordination can improve the quality of financial reporting.
  • Enhancing training and continuing professional development (CPD) can support the growth of the profession.
  • The BPO industry is a significant beneficiary of the skilled accountancy workforce.

Conclusion

The ROSC A&A report underscores the importance of improving the institutional framework, enhancing the quality of financial reporting, and aligning with international standards to support Sri Lanka's economic development goals. It outlines a series of policy recommendations aimed at addressing the current gaps and promoting global competitiveness and transparency in the financial reporting system. The report is a valuable tool for guiding the country's action plan and ensuring comparability and credibility in financial information for investors and stakeholders.