STATUTORY FRAMEWORK FOR ACCOUNTING

The Companies Act No. 7 of 2007 stands as the cornerstone of Sri Lanka's accounting regulations. Enshrined within its provisions is a mandate for companies to adhere to accounting standards set forth by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka). These standards, known as Sri Lanka Accounting Standards (SLFRS), serve as the bedrock for financial reporting, ensuring consistency and comparability in the disclosure of financial information.

But that's not all. Sri Lanka's embrace of International Financial Reporting Standards (IFRS), championed by the CA Sri Lanka, elevates its stature on the global stage. By aligning with IFRS, Sri Lankan firms bolster the integrity and reliability of their financial statements, fostering investor trust and facilitating cross-border investments. It's a testament to Sri Lanka's commitment to harmonizing its accounting practices with international norms, driving economic prosperity in the process.

Enter the Securities and Exchange Commission of Sri Lanka (SEC), the guardian of financial integrity in the country's capital markets. Charged with overseeing listed companies' compliance with accounting rules, the SEC plays a pivotal role in safeguarding investor interests. Through diligent regulation and supervision, the SEC ensures that financial reporting processes adhere to legislative mandates, promoting market efficiency and reducing information asymmetry.

As scholars have noted, a robust regulatory framework is the linchpin of financial transparency and accountability. Studies by Jayasiasymmetry Andhewa underscore the pivotal role of regulation in enhancing financial reporting quality, paving the way for capital market development and sustained economic growth.

In essence, Sri Lanka's statutory framework for accounting isn't just about numbers on a page—it's a testament to the nation's commitment to integrity, transparency, and growth. Join us as we continue to explore the dynamic interplay between regulation and prosperity in Sri Lanka's financial ecosystem.