Sri Lanka must upgrade accounting rules: experts

Dec 15, 2009 (LBO) – Sri Lanka will have to keep pace with global accounting standards to attract foreign investments as competing regional economies like China adopt better book keeping rules and reduce risk premiums, senior auditors said.

“Now premiums are coming down. China has to compete with the rest of the world for capital, so now they want to implement international financial reporting standards (IFRS) before the US,” Reyaz Mihular, partner at auditing firm KPMG said.

“Then the risk premium for the (accounting) framework goes away,” he told a seminar organised by the Association of Chartered Certified Accountants.

Auditors said by end-2010 all IFRS accounting standards endorsed by the International Accounting Standards Board (IASB) will be rolled out in the island with a two-year window to implement.

The new rules have been adopted by 100 countries including the European Union, South Africa and Australia.

The IASB aims to create global accounting standards that are transparent, enforceable, understandable and of high quality.

The lack of uniformity in accounting across borders creates discrepancies that lead to more mistakes, confusion and in some cases fraud as more businesses go global.