Bangkok, 24 May 2022 – The Securities and Exchange Commission (SEC) has published the Annual Activities Report of Audit Quality Review for the year 2021 (“Activities Report 2021”), which shows continuing improvement of audit quality in the capital market. Essentially, 53 percent of audit firms in the capital market have a Good to Very Good quality control system. Small audit firms have enhanced their quality in equivalent to their bigger peers, and 96 percent of the auditors approved by the SEC have obtained the Good to Very Good evaluation results of audit performance. The SEC will continue to enhance the financial reporting qualtiy and support audit firms in the capital market in strengthening their audit work quality to ensure continuing investor protection.
The SEC emphasizes the importance of supporting relevant parties and key stakeholders in the financial reporting ecosystem to ensure that they are capable of performing their duties appropriately. Several projects and activities related to enhancing the quality of financial reports are organized on a continuing basis to strengthen credibility of finanical reports and investor protection. This includes inspection of audit firms’ quality control systems, which has been running since 2010.
According to the Activities Report 2021, audit firms in the capital market have continued to improve their quality control systems. Of the total 32 audit firms, 53 percent received the Good to Very Good evaluation results – an improvement from 48 percent in 2019 and from 51 percent in 2020. In addition, seven audit firms received Very Good evaluation results, three of which are small sized audit firms. This is a significant progress in the audit industry as, dispite their size, small audit firms are able to elevate their audit work quality to be on par with bigger audit firms. This means the work plan that the SEC supports is a success and the quality of small and medium-sized audit firms is on the rise.
In addition, the overall audit quality of auditors in the capital market continues on the upward trend as well, with 96 percent of the auditors approved by the SEC in 2021 receiving the Good to Very Good evaluation results, compared to 90 percent in 2019 and 93 percent in 2020. The strong determination of the heads of audit firms contributes to the ongoing enhancement of audit work quality of affiliated auditors. Besides, the SEC organizes various projects regularly to develop audit work quality. For example, hosting training sessions and online seminars to share knowledge with auditors in the capital market, and giving advice on relevant professional standards via a hotline channel.
SEC Secretary-General Ruenvadee Suwanmongkol said: “For future plans, the SEC will continue to dedicate efforts to ensure that related parties are able to perform their respective duties to the fullest capacity. This is to support a well-balanced financial reporting ecosystem and enhance the quality of financial reports of businesses in the Thai capital market. Concurrently, the SEC encourages audit firms in the capital market to build up their strength through the three mechanisms, namely Self-discipline, Market Force, an Regulatory Discipline. The SEC also cooperates with relevant agencies to enhance financial report quality, investor protection, and competitive edge in the foreign arena.”
The Activities Report 2021 is available for free downloads at www.sec.or.th.
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