INSTITUTE OF CHARTERED ACCOUNTANTS [Cap.

119

CHAPTER 119
INSTITUTE OF CHARTERED ACCOUNTANTS

Acts AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF AN INSTITUTE OF CHARTERED

Nos. 23 of 1959, ACCOUNTANTS OF SRI LANKA AND OF A COUNCIL OF THE INSTITUTE WHICH
16 of 1964,
Law SHALL BE RESPONSIBLE FOR THE MANAGEMENT OF ITS AFFAIRS AND FOR THE
No. 34 of 1975. REGISTRATION AND CONTROL OF AND THE MAINTENANCE OF PROFESSIONAL
STANDARDS AND DISCIPLINE BY MEMBERS OF THE INSTITUTE IN SRI LANKA AND
FOR MATTERS CONNECTED WITH OR INCIDENTAL TO THE MATTERS AFORESAID.

[15th December, 1959.]

Short title. 1. This Act may be cited as the Institute (ii) a person who is a member of any
of Chartered Accountants Act. society or institute of accountants
by whatever name called and approved
ESTABLISHMENT OF INSTITUTE AND by regulations made by the Council
MEMBERSHIP as being in the opinion of the
Council an association of
Establishment 2. There shall be an Institute with the equivalent status to the -Institute:
of Institute of name "The Institute of Chartered
Chartered Provided, however, that
Accountants of Accountants of Sri Lanka" (hereinafter notwithstanding the approval of
Sri Lanka. referred to as " the Institute "). any such society or institute the
Council may declare that any class
Incorporation 3. (1) The persons for the time being or description of members of the
of Institute. enrolled as members of the Institute shall be society or institute shall not be
a body corporate with the name " The eligible for membership of the
Institute of Chartered Accountants of Sri Institute; and
Lanka".
(iii) a person who was, at the I5th day of
(2) The Institute shall have perpetual December, 1959, registered as an
succession and a common seal and may sue Auditor under the Companies
or be sued in its corporate name and may (Auditors) Regulations, 1941.
hold, acquire and dispose of any property,
(2) Any regulations made by the Council
movable or immovable. prescribing practical training for the
purpose of paragraph (i) of subsection (1)
Eligibility for 4. (1) Subject to the provisions of may contain such special provisions as the
membership of section 15, the following persons shall be
Institute. Council may deem expedient declaring that
[§ 2, Law 34 of eligible for membership of the Institute:— a person who had commenced prior to the
1975.] 15th day of December, 1959, or the 29th day
(i) a person who passes the qualifying
of August, 1975, and completed or
examinations for membership of
completes, whether prior to or after the
the Institute to be conducted by the aforesaid dates, training as an articled clerk
Council under this Act and under a practising accountant for such
completes a scheme of practical period as may be specified in the regulations
training approved by the Council shall be deemed to have completed the
and for such period as may be training prescribed for the purposes of the
prescribed by the Council: aforesaid paragraph (i).
Provided, however, that such (3) Any regulations made by the Council
practical training shall not be by which any society or institute is approved
restricted to service under a for the purposes of paragraph (ii) of
practising accountant; subsection (1) may provide, as a condition

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Cap. 119] INSTITUTE OF CHARTERED ACCOUNTANTS
of such approval, that a member of such the Council of a prescribed fee. Such
society or institute shall not be eligible for member shall upon registration by the
membership of the Institute of Chartered Council as a Fellow of the Institute be
Accountants of Sri Lanka, unless he has entitled to use the addition " F.C.A. " after
undergone such training as approved by the his name to indicate that he is a Fellow.
Council for such period as may be specified.
(4) Every member of the Institute who is [§ 3, Law 34 of
Fee for 5. (1) Subject to the provisions of not registered under subsection (2) or 1975.]
membership of section 15 a person who is eligible for subsection (3) as a Fellow of the Institute
Institute.
membership of the Institute shall be shall be an Associate Member and shall
enrolled as a member upon payment to the have the right to use the addition " A.C.A. "
Council of a fee of one hundred and twenty- after his name to indicate that he is an
five rupees or such other amount as may be Associate Member.
substituted therefor by regulation. Such fee
shall be paid to the president of the Council (5) Every member of the Institute shall be
or, if the Council has not been constituted, entitled to take and use the title " Chartered
to the Registrar of Companies. Accountant".

(2) The enrolment of a person as a

member of the Institute shall be effective THE COUNCIL
until the thirty-first day of December of the
year of enrolment; and the enrolment may 7. (1) There shall be a Council of the Constitution of
be renewed annually upon payment to the Institute, in this Act referred to as "the Council.
Council of the prescribed fee in respect of Council".
each such renewal.
(2) The Council shall consist of a [§ 5,16 of
Classification 6. (1) The members of the Institute shall president, a vice-president and ten other 1964.]
of members as be divided into two classes consisting members appointed or elected as hereinafter
Fellows and provided.
Associates. respectively of Fellows and Associate
Members.
(3) During the period of ten years [§ 5,16 of
[§ 3, Law 34 of (2) Any member of the Institute who commencing on the 15th day of December, 1964.]
1975.] satisfies the Council that he has been in 1959, the president, the vice-president and
continuous practice as an accountant for the other members of the Council shall be
not less than five years, whether before or appointed by the Minister, and of the
after the 15th day of December, 1959, or members so appointed at least six shall be
partly before and partly after that date, or, persons who are members of the Institute,
who has completed ten years as a member of whom not more than four-shall be
of the Institute, shall on application made to practising accountants,
the Council in that behalf on or before
December 31, 1985, and on payment to the (4) After the expiration of the period of [§ 5, 16 of
Council of a prescribed fee be registered by ten years referred to in subsection (3), the 1964.]
the Council as a Fellow of the Institute and president and the vice-president of the
shall be entitled to use the addition Council shall be elected by the members of
" F.C.A. " after his name to indicate that he the Institute from themselves, and the
is a Fellow. remaining members of the Council shall
consist of—
[§ 3, Law 34 of (3) Any member of the Institute who is
1975.] not eligible for registration by the Council (a) six members appointed by the
as a Fellow of the Institute in terms of Minister, and
subsection (2) shall be eligible for
registration by the Council as a Fellow of (b) four members elected by the members
the Institute on passing the Fellowship of the Institute from among its
Examination to be conducted by the members, of whom not more than
Council and on application made to the three shall be practising
Council in that behalf and on payment to accountants:

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 INSTITUTE OF CHARTERED ACCOUNTANTS [Cap. 119
Provided, however, that— 9. (1) The Council shall be charged with General powers
the administration and management of the and duties of
. „ , .„ ,.
(i) where the Minister fails to appoint, Institute and shall be responsible for Council.
within three months after the carrying out the provisions of this Act and
expiration of the period of ten years the functions and duties conferred or
referred to in subsection (3), one or imposed upon the Council by this Act.
more of the members specified in
paragraph (a) of this subsection, or (2) It shall be the duty of the Council— [§ 4, Law 34 of
1975.]

(ii) where the Minister fails to appoint, (a) to conduct or provide for the conduct
within three months after the death of the qualifying examinations for
of, or vacation of office by, a membership of the Institute and to
member of the Council appointed prescribe or approve courses of
under paragraph (a) of this study for such examinations ;
subsection, another person in place
(b) to supervise and regulate the
of such member,
engagement, training and transfer
the members of the Institute may elect from of articled clerks who have entered
themselves such number of persons as may into articles of agreement on or
be necessary to make up the number of before the 29th day of August,
members specified in paragraph (a) of this 1975;
subsection.
(c) to supervise and regulate the
(5) The elections under subsection (4) registration of students and the
shall be conducted in accordance with such courses of practical training for
provisions in that behalf as may be made by such registered students for such
the Minister by Order published in the period as may be prescribed by the
Gazette. Council;
(d) to specify the class of persons who
Term of office 8. (1) Every member of the Council
of members of shall, unless he earlier vacates his office, shall have the right to train articled
the Council. clerks who have entered into
hold office for a period of two years from
articles of agreement on or before
the date of his appointment or election :
the 29th day of August, 1975, and
Provided, however, that the members to specify the circumstances in
appointed under subsection (3) of section 7 which any person of that class may
and holding office at the expiration of a be deprived of that right;
[§ 6, 16 of period of ten years from the date referred to
(e) to fix the maximum amount of the
1964.] in that subsection shall thereupon vacate
premia or fees to be charged from
office.
articled clerks who have entered
(2) A member of the Council shall vacate into articles of agreement on or
office by resignation therefrom or if he before the 29th day of August,
ceases to be a member of the Institute. 1975, and the conditions subject to
which such fees are to be charged ;
(3) In the event of the death of, or
(f) to maintain and publish a register of
vacation of office by, a member of the
members of the Institute and a
Council, another person shall, in accordance
register of persons authorized to
with the provisions of section 7, be practise in Sri Lanka as Chartered
appointed or elected, as the case may be, in Accountants;
place of such member, and shall hold office
during the remaining part of the term of (g) to secure the maintenance of
office of such member. professional standards among
members of the Institute and to
(4) Any member of the Council who take such steps as may be necessary
vacates office by effluxion of time shall be to acquaint them with the methods
eligible for reappointment or re-election as a and practices necessary to maintain
member. such standards;

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Cap. 119] INSTITUTE OF CHARTERED ACCOUNTANTS
(h) to maintain a library of books and published in the Gazette and copies thereof
periodicals relating to accountancy shall be furnished to the Minister and to
and to encourage the publication of each member of the Institute.
such books in Sri Lanka;
(6) As soon as convenient after the 15th
(i) to carry out and encourage research in day of December, 1959, the Government
Sri Lanka in the subjects of shall donate to the Council a sum of two
accountancy, audit and other hundred thousand rupees.
related subjects and generally to
promote the education, training and (7) The Minister in charge of the subject
advancement of the registered of Finance may from time to time decide
students and secure the well-being that a temporary loan shall, subject to such
and advancement of the profession conditions as he may determine, be made to
of accountants; the Council from the Consolidated Fund in
order to enable the Council to meet any
(j) to approve the scheme of practical current liabilities pending the receipt of
training to be followed by the income by the Council. Any sum which is to
registered students; and be tent to the Council under this subsection
is hereby charged on the Consolidated Fund :
(k) to require any institution to provide
information to the Council with Provided, however, that the total amount
regard to facilities available for of such loans to the Council outstanding at
training students in accounting and any time shall not exceed ten thousand
audit. rupees.

Officers of the 10. The Council may appoint a secretary

Council. and such other officers and servants as it 12. (1) The Council may make Power to make
may deem necessary. regulations for or in respect of any matter regulations.
required or authorized by this Act to be
prescribed or of any matter relating to or
Financial 11. (1) The Council shall establish and connected with its powers, functions and
provisions. maintain a fund under its management and duties under this Act or the proper exercise,
control into which shall be paid all moneys discharge or performance thereof.
received by the Council and out of which
shall be met all expenses and liabilities
(2) Without prejudice to the generality of
incurred by the Council in carrying out its
the provisions of subsection (1), the Council
powers, functions and duties under this Act.
may make regulations in respect of all or
any of the following matters:—
(2) The Council may invest moneys in the
fund in any securities issued or guaranteed
(a) the summoning and holding of
by the Government of Sri Lanka or in any
meetings of the Council, the times
other securities approved by the Minister.
and places of such meetings and the
conduct of business thereat;
(3) The Council may maintain an account
in any bank or banks in Sri Lanka.
(b) the management of the property of
(4) The annual accounts of the Council the Council, the custody of its funds
shall be subject to audit by a member of the and the maintenance and audit of
Institute (not being a member of the its accounts;
Council) in practice as a Chartered
Accountant in Sri Lanka who shall be (c) the election or appointment by the
appointed for the purpose each year by the Council of standing or other
Council. committees, the powers, functions
and duties of such committees, and
(5) As soon as may be after the end of the conditions subject to which such
each financial year of the Council, the powers may be exercised and such
accounts for the preceding year shall be functions and duties performed;

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(D) the powers, functions and duties of (c) if having been adjudged an insolvent
the secretary and other officers of or bankrupt, he has not been
the Council and the salaries, fees, granted by a competent court a
allowances and conditions of certificate to the effect that his
service of such officers and insolvency or bankruptcy has arisen
servants; wholly or partly from unavoidable
losses or misfortunes;
(e) the establishment and regulation of a
provident fund for the benefit of the (d) if he has been convicted by a
officers and servants and their competent court, whether in Sri
dependants or nominees, and the Lanka or elsewhere, of any offence
contributions to be made by the involving moral turpitude and
Council and by such officers and punishable with imprisonment or
servants to such Fund ; similar punishment and has not
been granted a free pardon.
(f) the exercise of disciplinary control
over officers and servants of the (2) The Council shall disenrol any person
Council; who is a member of the Institute, if he [§ 11,16 of
becomes subject to any disqualification 1964.]
(g) the time and manner of the payment mentioned in paragraph (b) or paragraph (c)
of enrolment, registration and or paragraph (d) of subsection (1) of this
renewal fees, the termination of section:
membership upon failure to pay
renewal fees and the conditions of Provided, however, that such [§11, 16 of
restoration to membership in such disenrolment shall not prevent the Council 1964.]
cases; from subsequently re-enrolling such person
if satisfied that he is fit to practise the
(h) the fees to be paid to the Council by profession of an accountant and auditor.
students admitted to the qualifying
examinations or for courses of
16. (1) The Council may disenrol any Disenrolment
instruction provided by the for
individual who is a member of the Institute,
Council, and the engagement and professional
if satisfied that he is unfit to practise the misconduct.
remuneration of lecturers and
profession of an accountant and auditor by [§ 12, 16 of
examiners; and 1964.]
reason that he has been guilty of
professional misconduct.
(i) the grant of assistance, whether
financial or otherwise, to societies
(2) The disenrolment of the registration [§12,16 of
of students.
of any person under subsection (1) shall not 1964.]
prevent the Council from subsequently re-
[§ 10, 16 of QUALIFICATIONS FOR ENROLMENT, AND
enrolling that person, if satisfied that he is
1964.] PROVISIONS AS TO DISENROLMENT, ETC.
fit to practise the profession of an
accountant and auditor.
General dis- *15. (1) No person shall be enrolled as a
qualifications, member of the Institute-
[§ 11, 16 of
17. (1) The Council shall not, under Inquiries by
1964.] disciplinary
(a) unless he has attained the age of section 16, disenrol any person, unless a
committees.
twenty-one years and is either a disciplinary committee has, after inquiry,
citizen of Sri Lanka or has made a report to the Council that the person [§13,16 of
1964.]
ordinarily resided in Sri Lanka for has been guilty of professional misconduct.
a period of not less than three
years; (2) Where the Council has reasonable
cause to believe, whether upon complaint
(b) if he has been adjudged by a made to it or otherwise, that any person
competent court to be of unsound who is a member of the Institute has been [§ 13, 16 of
mind; guilty of professional misconduct, the 1964.]
* Sections 13 and 14 are repealed by Act No. 16 of 1964.

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Cap. 119] INSTITUTE OF CHARTERED ACCOUNTANTS

Council may appoint a disciplinary RESTRICTIONS ON PRACTICE AS

committee for the purpose of holding an ACCOUNTANTS
inquiry into the conduct of that person.
21. (1) No person who is a member of Restrictions on
(3) The provisions of the First Schedule* the Institute or is a partner of any such firm practising as
to the Act shall apply in relation to the accountant.
of accountants as is referred to in subsection [§ 15, 16 of
constitution of and the procedure to be (3) of section 22 shall practise as an 1964.]
followed by disciplinary committees accountant unless he is the holder of a
appointed under this section, the certificate to practise which is for the time
proceedings at inquiries held by such being in force:
committees and the powers exercisable by
such committees. Provided, however, that such certificate [§ 5, Law 34 of
to practise shall not be issued to a member 1975.]
(4) The Minister may, upon the
of the Institute unless such person has had
recommendation of the Council, by Order
at least a period of two years' practical
published in the Gazette, amend or alter or
training in a firm of practising accountants
add to or revoke any or all of the provisions
after he has passed one of the qualifying
of the First Schedule.*
examinations prescribed by the Council.
(5) The provisions of the First Schedule*
for the time being in force shall be as valid (2) Every certificate to practise shall be
and effectual as if they were herein enacted. issued by the Council upon payment of the
prescribed fee; different fees may be
Suspension in 18. In any case where the Council is by prescribed in respect of Fellows, Associate [§ 15,16 of
lieu of section 16 empowered to disenrol any Members, and partners of any such firm of 1964.]
disenrolment. accountants as is referred to in subsection
person from membership of the Institute,
[§ 14, 16 of the Council may, in lieu of exercising that (3) of section 22 respectively.
1964.]
power, suspend the person from (3) Every certificate to practise shall be in
membership for such period as the Council force until the thirty-first day of December
may deem fit. of the year of issue of that certificate, and
may from time to time be renewed upon
Appeal to the 19. (1) Any person aggrieved by a payment of the fee prescribed as provided in
Court of decision of the Council under section 16 or
Appeal from subsection (2).
decisions of the section 18 may appeal against that decision
Council under to the Court of Appeal. (4) Where each of the partners in a firm
section 16 or
section 18. of accountants is the holder of a certificate
(2) Every appeal under subsection (I)
to practise, no such certificate shall be
against a decision—
required to authorize the firm to practise as
(a) shall be made by petition in writing accountants.
bearing a stamp of one rupee ;
(5) The preceding provisions of this
(b) shall be preferred within ten days section shall not come into operation until
after the date of that decision. such date as may be fixed by the Minister
by Order published in the Gazette.
Meaning of 20. (1) For the purposes of this Act,
" professional " professional misconduct" means any act (6) Where all or any of the partners of a [§ 15,16 of
misconduct". firm of accountants are not citizens of Sri 1964.]
or omission which is for the time being
specified in the Second Schedule* to this Lanka and are not qualified to be members
Act. of the Institute by reason of the fact that
they have not- ordinarily resided in Sri
(2) The Minister may, upon the Lanka for a period of not less than three
recommendation of the Council, by Order years, then, if the number of partners who
published in the Gazette, amend or alter or are not such citizens and are not so qualified
add to any or all of the provisions of the is increased by the admission to that firm of
Second Schedule+. a partner who is not a citizen of Sri Lanka
* First and Second Schedules are omitted.
+ Second Schedule is omitted.

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 INSTITUTE OF CHARTERED ACCOUNTANTS [Cap. 119

and who has not ordinarily resided in Sri remuneration received or to be received, and
Lanka for a period of not less than three whether by himself or in partnership with
years, that firm shall not practise as any other person, he—
accountants.
(a) engages himself in the practice of
RESTRICTIONS AS TO USE OF TITLES, ETC. accountancy or holds himself out to
the public as an accountant; or
Restrictions as 22. (1) No person, not being a member
to use of titles of the Institute, shall take or use the title (b) offers to perform or performs service
conferred
under this Act. " Chartered Accountant ", or any addition involving the auditing or
mentioned in section 6. verification of financial transactions
books, accounts or records, or the
(2) Notwithstanding anything in preparation, verification, or
subsection (1) any firm of accountants, each certification of financial accounting
of the partners of which is a member of the and related statements; or
Institute, may take and use the title
" Chartered Accountants ". (c) renders professional service or
assistance in or about matters of
(3) Notwithstanding anything in principle or detail relating to
subsection (1), any firm of accountants all accounting procedure or
or any of the partners of which are not certification of financial facts or
citizens of Sri Lanka and are not qualified data; or
to be members of the Institute by reason of
the fact that they have not ordinarily resided (d) renders any other service which may
in Sri Lanka for a period of not less than be declared by the Council by
three years may, if that firm was in practice regulation to be service constituting
[§ 16. 16 of on the ninth day of February, 1959, take practice as an accountant.
1964.] and use the title " Chartered Accountants ".
(2) A person who is the salaried employee
MISCELLANEOUS PROVISIONS of the Government or of any one employer
shall not, by reason only that he does any
Offences and 23. (1) Any person who contravenes act referred to in subsection (1) in his
penalties. any provision of this Act shall be guilty of capacity as such employee, be deemed to
an offence and shall be liable, on conviction practise as an accountant.
after summary trial before a Magistrate, to
imprisonment of either description for a 25. Notwithstanding anything in the Transitional
term not exceeding six months or to a fine preceding sections of this Act, the following arrangements.
not exceeding one thousand rupees or to provisions shall apply in relation to the first
both such imprisonment and fine. enrolment of members of the Institute and
the Constitution of the first Council to hold
(2) Any person who is declared by any office under this Act:—
rule in the First Schedule* to be guilty of an
offence under this Act shall be liable, on (1) As soon as may be after the 15th day
conviction after summary trial before a of December, 1959, the Minister
Magistrate, to a fine not exceeding five shall in terms of subsection (3) of
hundred rupees. section 7 appoint a person to be the
president of the Council.
(3) No prosecution for any offence under
this Act shall be instituted except by a (2) The president shall, by notice
member or officer of the Council authorized published in the Gazette and in at
in writing for the purpose by the Council. least two daily newspapers
circulating in Sri Lanka, call upon
Meaning of 24. (1) For the purposes of this Act, a persons eligible for membership of
" practise " person shall be deemed to practise as an the Institute to make application
a c c o u n t a n t if, in c o n s i d e r a t i o n of therefor.
* First Schedule is omitted.

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Cap. 119] INSTITUTE OF CHARTERED ACCOUNTANTS
(3) The president shall, subject to the for the purpose of enabling him to
provisions of sections 5 and 15, make the other appointments for
enrol as members of the Institute all which provision is made in
persons eligible for such subsection (3) of section 7.
membership who make application
in that behalf within the period of
three months immediately (5) As soon as may be after all
succeeding the 15th day of appointments are made, the
December, 1959. Minister shall by Order published
in the Gazette specify the date on
(4) The names of the persons enrolled which the first Council established
under paragraph (3) of this section under this Act shall commence to
shall be presented to the Minister hold office.

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