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SEC reveals progress on study on audit firm-auditor supervision laws in foreign country to hasten Thai oversight system



Wednesday 15 January 2020 | No. 8 / 2020


Bangkok, 15 January 2020 - SEC revealed progress after engaging TDRI to conduct a study on laws pertinent to the oversight of audit firms and auditors in Thai capital market in comparison with foreign laws for preparation of suggestion for amendment of the Securities and Exchange Act to ensure better efficiency and effectiveness in supervising the audit firms and auditors in Thai capital market.

In November 2019, SEC engaged the Thailand Development Research Institute (TDRI) to conduct a study on laws pertaining to the supervision of audit firms and auditors in foreign capital markets for supporting amendment of the Securities and Exchange Act B.E. 2535 (Securities and Exchange Act) to allow more effective and efficient supervision of audit firms and auditors in Thai capital market.

SEC Secretary-General Ruenvadee Suwanmongkol said: “This is the first time SEC contracts an independent expert to study relevant laws on supervision of the audit firms and auditors in Thai capital market in comparison with foreign laws. TDRI is studying the pertinent laws in order to prepare suggestions for amendment of the Securities and Exchange Act. So far the study has covered the laws of 5 major countries. Initially, it is found that most countries have the laws allowing an agency to oversee the audit firms and to convene a meeting to seek opinions and advice on the amendment of the Securities and Exchange Act from stakeholders. The result of the study and the suggestions on that matter is expected to be completed in May 2020.

“Then, SEC will promptly proceed with the amendment of the Securities and Exchange Act in order to ensure that the enforcement of the law and the enhancement of the protection of investors in the capital market will be more effective and consistent with the suggestions received from the latest Financial Sector Assessment Program (FSAP) in 2019, requesting SEC to amend the Securities and Exchange Act to impose sanctions on the audit firms in the capital market.

“In addition, SEC will report the study result to the Department of Business Development, Ministry of Commerce as information supporting, where relevant, the amendment of the Accounting Professions Act B.E. 2547, which will lead to the improvement of the audit oversight in Thailand”

SEC gives priority to audit quality which is an essential factor to raise the credibility of the financial reporting system of firms in the capital market. Furthermore, the quality control system of the audit firms greatly contributes to the quality performance of auditors. The SEC now requires that auditors in the capital market must be attached to the audit firms which have a work system in accordance with the quality control standard. However, in the current structure of laws pertinent to the audit oversight in Thailand, priority is given to supervision of individual auditors, but the competent agency is not given the power to directly supervise the audit firms.

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