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Overhaul of supervision of auditing practices under way

Jun 25. 2019
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By  THE NATION

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THE Ministry of Commerce is leading an effort that will pave the way for an overhaul in the supervision of auditing practices alongside efforts to attract more professionals into the sector as capital markets expand.

 The ministry is working with the Federation of Accounting Professions and the Securities and Exchange Commission (SEC) to reform auditing procedures and supervision of the service providers.

Boonyarit Kalayanamit, commerce permanent-secretary and the chairman of a committee supervising the accounting profession, said that the reform moves were expanding in their scope to include auditing offices, rather than the control only of accounting auditors as originally envisaged.

 “Initially, the SEC hired researchers to study foreign laws related to the supervision of auditing offices and auditors as information for the planned amendment of the Securities and Exchange Act, B.E. 2535,” Boonyarit said. “The Ministry of Commerce’s Department of Business Development is considering to propose an amendment of the Accounting Professions Act, B.E. 2547 so that it will be in line with the planned restructuring.”

The three parties plan to encourage accounting auditors to work in the capital markets in order to meet future needs, he said.

Some 240 of the 9,988 certified auditors – just 2.4 per cent of the total - work in the Thai capital markets serving 712 listed companies. There could be a shortage of accounting auditors in the future.

“Auditing involves services to gain the public’s confidence. Quality auditing will help related parties, particularly investors and the business sector, to have confidence to analyse financial statements before making a decision to invest,” Boonyarit said.

Ruenwadee Suwannamongkol, SEC secretary-general, said that in order to promote greater quality in securities research, the SEC has teamed up with the Stock Exchange of Thailand (SET) and Investment Analysts Association (IAA) to produce improved securities research for 100 securities within three years.

The securities watchdog expects this cooperation to help the capital markets with broader information and opportunities for new analysts. Presently, securities researches have been centralised in big-capitalisation securities.

The IAA will manage this cooperation project with an estimated investment budget of about Bt24 million. The budget will have equal contributions from the SEC and the SET.

SET president Pakorn Peetathawatchai said that the project has three main policy concerns: coverage, quality and access. The research outcomes are expected to start being seen in September.

IAA president Paiboon Nalinthrangkurn said that research efforts now cover about 250 securities, or 30 per cent of the total of 780, in the capital markets and there are about 280 analysts that analyse individual securities but have not yet covered securities investment. This means more research is needed.

The project will continue for three years and 100 items of securities research relating to 40 securities are estimated for the first year, with expectations of this number rising to 70 in the second year and 100 in the third year, he said.

The securities covered in the project must not be included in SET 100 Index of stocks with a market capitalisation of more than Bt3 billion, he said.

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