The Securities and Exchange Commission of Sri Lanka (SEC) and the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) have entered into a strategic partnership to enhance cooperation in the oversight of financial reporting and auditing standards.
The two institutions recently signed a Memorandum of Understanding (MOU) establishing a formal framework for collaboration. The agreement was signed by Senior Prof. D.B.P.H. Dissabandara, Chairman of the SEC, and Mrs. K.M.A.N. Daulagala, Chairperson of the SLAASMB.
Under the MOU, the SEC will continue to scrutinize annual reports and financial statements of entities regulated under the SEC Act, including stock exchanges, stock brokers and dealers, unit trusts, fund management companies, and listed companies in line with applicable regulatory rules and the disclosure requirements of Sri Lanka Accounting Standards (LKASs/SLFRSs).
Meanwhile, the SLAASMB will examine the same entities for compliance with Sri Lanka Accounting Standards and Sri Lanka Auditing Standards.
Both institutions have agreed to maintain a structured information-sharing mechanism. The SEC will notify the SLAASMB of material non-compliance with accounting standards, key regulatory decisions, auditor-related matters, and investigation findings that may affect financial statements. In turn, the SLAASMB will keep the SEC informed of non-compliance by entities or auditors, investigations initiated, final determinations, and any directions issued relating to financial reporting.
The agreement also provides for the referral of complaints on non-compliance with accounting and auditing standards, ensuring prompt action under the relevant statutory framework. Additionally, the two bodies will collaborate on joint public awareness initiatives aimed at promoting transparency in financial reporting and strengthening corporate governance practices.
The MOU preserves the statutory independence of both institutions, operates on a non-exclusive basis, and includes strict confidentiality provisions governing the handling of sensitive information.
Officials said the partnership reflects the shared commitment of the SEC and the SLAASMB to enhancing investor confidence, strengthening market integrity, and promoting high standards of financial reporting in Sri Lanka’s capital market.
