The Securities and Exchange Commission of Sri Lanka (SEC) and the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) have recently strengthened their collaboration in overseeing financial reporting and auditing standards by signing a Memorandum of Understanding (MOU).
Senior Prof. D.B.P.H. Dissabandara, Chairman of the SEC, and Mrs. K.M.A.N. Daulagala, Chairperson of the SLAASMB, signed the agreement. This MOU establishes a formal framework for cooperation between the two entities, focusing on entities licensed under the SEC Act to operate a stock exchange, conduct business as stock brokers and dealers, manage unit trusts, fund management companies, and listed companies.
Under this MOU, the SEC will continue to review annual reports and financial statements of these entities in accordance with applicable regulatory rules and the disclosure requirements of Sri Lanka Accounting Standards (LKASs/SLFRSs). Meanwhile, the SLAASMB will ensure that these entities comply with Sri Lanka Accounting Standards and Auditing Standards.
Both institutions have agreed to maintain a structured information-sharing mechanism. The SEC will inform the SLAASMB of any significant non-compliance with accounting standards, relevant regulatory decisions, auditor-related matters, and investigation findings that might impact financial statements. Similarly, the SLAASMB will update the SEC on non-compliance by entities or their auditors, any initiated investigations, final findings, and directions issued concerning financial reporting.
The MOU also facilitates the referral of complaints related to non-compliance with accounting and auditing standards, ensuring prompt resolution under the relevant legal framework. Additionally, the two organizations will collaborate on public awareness initiatives aimed at promoting transparency in financial reporting and enhancing corporate governance practices.
The agreement maintains the statutory independence of both institutions, operates on a non-exclusive basis, and includes strict confidentiality provisions for handling sensitive information.
This partnership underscores the SEC and SLAASMB’s shared commitment to boosting investor confidence, strengthening market integrity, and promoting high standards of financial reporting within Sri Lanka’s capital market.
