Bangkok, 13 January 2023 – The Securities and Exchange Commission (SEC) is seeking public comments on a proposed amendment to the regulations governing the requirement that audit firms maintain a minimum number of auditors in the capital market to ensure sufficient personnel to provide high-quality audit service to listed companies in compliance with the professional standards.
In addition to stricter professional standards, audit firms in the capital market are now required to comply with the International Standard on Quality Management (ISQM) 1 and ISQM 2, which have become effective since 15 December 2022. Pursuant to ISQM 1 and ISQM 2, audit firms are required to have a quality management system which gives more oversight responsibilities to executive auditors, while engagement quality reviewers (EQR) of listed companies must have competence, capabilities and authority at a level not less than auditors in the capital market who audit listed companies. In the event that an auditor appointed by an audit firm is unable to perform audit work for a listed company and the audit firm has an insufficient number of auditors in the capital market to handle the situation, the listed company may have to take on more burden of appointing new auditors from other audit firms. Given such a scenario, audit firms should recruit sufficient auditors in the capital market to perform high quality and continuous audit work for listed companies in compliance with stricter professional standards.
The SEC is therefore reviewing related regulations* and proposing the requirement of a minimum of auditors in the capital market in audit firms, starting from a minimum of four auditors from 1 March 2026 before increasing to a minimum of six auditors, starting from 1 March 2029 onwards. The proposed amendment contains transitional periods to ensure that audit firms would have sufficient time to make necessary preparations. The SEC’s discussions in this regard with the Thailand Federation of Accounting Professions (TFAC), the Association of Thai Listed Companies and audit firms in the capital market confirmed that the concept and principles of the auditor minimum could favourably contribute to higher quality of audit performance in the capital market.
The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=865. Stakeholders and interested parties are welcome to submit comments and suggestions through the website or email: corporat@sec.or.th. The public hearing ends on 13 February 2023.
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* Notification of the Office of the Securities and Exchange Commission
No. Sor Shor. 39/2553 Re: Approval of Auditors in the Capital Market, dated 23 September 2010.