The Sri Lanka Accounting and Auditing Standards Monitoring Board was established under the Sri Lanka Accounting and Auditing Standards Act, No. 15 of 1995. The Act has identified certain  enterprises as specified business enterprises. These include all quoted companies, companies  carrying on business which are important for the purpose of monitoring (such as banking, finance, insurance, and leasing), other large companies (Public and Private), and Public Corporations. All specified business enterprises are required to send their Annual Audited Financial Statements to SLAASMB. The SLAASMB is empowered to call for documents, information and explanations from Directors, Managers and Auditors for the purpose of carrying out its functions. Where Financial Statements have not been prepared in accordance with Sri Lanka Accounting Standards, the SLAASMB could require an enterprise to make suitable corrections. The Board has the power to compound an offence for a sum of money not exceeding 1/3rd the maximum fine. In cases where noncompliance was done deliberately to mislead the public the courts may impose penalties extending up to 5 years imprisonment

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