The Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB), a statutory board, has been engaged in regulatory activities for over two decades. Established under the Sri Lanka Accounting and Auditing Standards Act, No. 15 of 1995, SLAASMB commenced active operations in 2000.
Its core functions are to monitor compliance with the Sri Lanka Accounting Standards and the Sri Lanka Auditing Standards in the preparation, presentation and audit of financial statements of specified business enterprises to enhance reliability of financial reporting in the country
The schedule to the act ct describes the enterprises as referred as Specified Business Enterprises (SBEs). These include all listed companies, companies carrying on business which are important for the purpose of monitoring (such as banking, finance, insurance, and leasing), other large companies (Public and Private), and Public Corporations providing goods or services. All specified business enterprises are required to send their annual audited financial statements to SLAASMB.
SLAASMB is empowered to call for documents, information and explanations from Directors, Managers and Auditors for the purpose of carrying out its functions. Where Financial Statements have not been prepared in accordance with Sri Lanka Accounting Standards the SLAASMB could require the entity to make corrections. Similarly, where the auditors had failed to comply with Sri Lanka Auditing Standards, SLAASMB could require the SBE to get the auditors to re-audit the financial statements or take action against the auditors under the powers of the act. When non- compliances are detected, SLAASMB has the power to compound an offence for a sum of money not exceeding 1/3rd of the maximum fine and in cases where a SBE or auditor has deviated from the standard deliberately to mislead the public, the courts may impose penalties extending up to 5 years imprisonment