Window Dressing

Financial statements of Sri Lankan firms are sometimes incorrectly presented because local auditors don’t keep up with new developments, the island’s accounting and auditing watchdog said. Financial statements of Sri Lankan firms are sometimes incorrectly presented because local auditors don’t keep up with new developments, the island’s accounting and auditing watchdog said. The watchdog is empowered to sniff through hundreds of ‘specified business enterprises’ who’s turnover exceeds Rs. 500 million.

Under the law, firms who fall into these criteria are mandated to send in their accounts at the end of the financial year.

But nearly five years into operation, the Sri Lanka Accounting & Auditing Standards Monitoring Board says companies play truant and fail to file their financial statements.

Of those who comply, nearly half of them are incorrectly prepared.

“Most are minor compliance offences. We write to the companies and they set it right. We don’t find many of the repeating the mistake the following year,” says watchdog chief Ajith Ratnayake in an interview with LBO.

His team waded through the financial reports of 280 companies in 2004, though in actual fact, the