Federation of Accounting Professions

Both the TFAC and the Securities and Exchange Commission (SEC) share responsibility for establishing quality assurance (QA) review systems in Thailand. TFAC’s QA review system covers audits of entities established under the Accounting Act B.E. 2543 (2000) while the SEC’s scope is that of audit firms of listed companies. The TFAC reports that although there are two QA review systems, it collaborates with the SEC to ensure there is no duplication of reviews.

The TFAC has been conducting its QA reviews through subcommittees that are approved by the TFAC Board to function for three-year terms. Since 2012, the TFAC Board has approved the Subcommittee of Development and Supervision on Quality Control Review of Auditors, which ran from 2011 to 2014, and the Audit Quality Oversight Subcommittee, which was established in 2014 and completed its three-year term in June of 2017, to conduct QA reviews. The TFAC reports that the establishment of a new subcommittee is ongoing.

Although the subcommittees have had different names, their responsibilities are the same and include educating and monitoring auditors and firms on the implementation of TSQC 1 and supervising the QA team. In 2018, the institute conducted an assessment of its QA system against the requirements of SMO 1 and identified several gaps in alignment with SMO 1 requirements. To date (2023), it remains unclear if there are any plans to address these gaps.

Regarding relevant standards (e.g., ISQM), TFAC reports that ISQM 1 is adopted TSQM 1 and is effective for auditors and firms for companies under the remit of the SEC. For all others, the effective date is December 15, 2023.

The TFAC has conducted trainings and workshop on TSQM over 2021 - 2023 and the institute has developed a Guidance for Implementation on Thai Standard on Quality Management for all audit firms and practitioners. A policy aimed at fostering awareness and understanding of ISQM among auditors engaged in the audit of non-listed companies has been established. TFAC also provides update related to audit quality management via its Facebook, website, and newsletters.

The TFAC is encouraged to clarify how it plans to address the issue of insufficient resources to carry out the reviews. It should also report on its efforts to address gaps identified during the self-assessment of its QA system against the requirements of SMO 1. The TFAC is encouraged to continue monitoring and supporting the implementation of ISQM 1 among members which is effective as of December 15, 2022. Resources on the quality management standards are available on the IFAC and IAASB websites.

Current Status: Plan

The Accounting Professions Act B.E. 2547 of 2004 authorizes the TFAC to promote education, training, and research related to the accounting profession in Thailand. To that effect, the Education and Technology Committee of the TFAC has established initial professional development (IPD) and continuing professional development (CPD) requirements and programs for professional accountants. The TFAC reports it has translated and incorporated the 2019 IES into its educational programming.

Since 2014, the TFAC has engaged with local universities to evaluate the quality of accounting programs being offered to students, and to approve and accredit those programs. The TFAC reports that it has hosted public seminars on the revised IES, and it has completed updating its curriculum to reflect newly issued standards. TFAC has revised its accreditation processes for accounting programs to align with the updated IES 2-4 whereby learning outcomes and competence areas must be within the curricula for approval.

TFAC also has processes to monitor the effectiveness of the practical experience (IES 5). TFAC sub-committee on CPA qualification will verify the log of training presented by potential CPAs.

TFAC members must maintain their membership status by completing 120 hours of CPD per triennium.

Current Status: Review & Improve

Under the Accounting Professions Act B.E. 2547 of 2004, the Federation of Accounting Profession (TFAC) has direct responsibility for establishing auditing standards. The TFAC reports that it has established an ongoing process to review, translate, and adopt new and revised pronouncements of IAASB. The 2020 IAASB Handbook have been translated and adopted as the Thai Standards on Auditing. TFAC reports that it plans to adopt 2021 IAASB Handbook by the end of 2023.

Through its Auditing Profession Committee, the institute maintains an ongoing processes to review and translate pronouncements by the IAASB into Thai, share them for public consultation, approve the final standards, and then disseminate the standards.

To support its members with implementation, the TFAC offers several trainings and seminars on new and revised standards. For example, in 2022, it organized an online session on ISA 600 (revised) in preparation for the 2023 effective date.

Between 2020-2021, it organized 3 online sessions on ISQM 1, ISQM 2, and ISA 220 (revised) in preparation of the 2022 effective date. The TFAC reports it has also translated the Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities: Volume 1 – Core Concepts and Volume 2 – Practice Guidance to support SMPs.

The TFAC also provides updates on IAASB pronouncements to members via member meetings, website updates, and the TFAC newsletter. Lastly, the TFAC participates in the international standard-setting process by reviewing and commenting on IAASB exposure drafts.

The TFAC has demonstrated that it plans, executes, and improves activities related to SMO 3 as part of an ongoing commitment to continuous improvement.

Current Status: Sustain

The Accounting Professions Act B.E. 2547 of 2004 authorizes the Federation of Accounting Profession (TFAC) to set ethical requirements. TFAC has implemented a continuous procedure for assessing, translating, and adopting the IESBA Code of Ethics. The 2020 International Code of Ethics issued by the IESBA has been translated and adopted. Presently (2023), efforts are underway to adopt the 2022 International Code of Ethics.

The institute’s Sub-Committee for Ethics Code Setting is responsible for maintaining a process to review IESBA’s pronouncements to ensure the Code of Ethics in Thailand is updated. The Committee has undertaken additional activities such as preparing explanatory guidelines, producing a condensed summary of the Handbook which contains guidance related to the Code for its members, and developing an Ethics Education presentation to be used at public seminars. The TFAC conducts these seminars on an ongoing basis across the country to educate its members.

In 2022, TFAC bolstered its approach to facilitate the implementation of the Code, encompassing, among other initiatives: (i) a stipulation of ethics courses as integral to the continuing professional development (CPD) criteria; (ii) the integration of the Code into educational materials; and (iii) organizing seminars, online webinars, and e-learning videos.

The TFAC also participates in the international standard-setting process by reviewing and responding to IESBA-issued exposure drafts such as the Proposed Revisions to the Code Addressing Tax Planning and Related Services in May 2023 and the definition of listed entity and public interest entity in May 2021. It coordinates with local stakeholders to assist them to submit their opinion as well.

The 2022 version of the International Code of Ethics is now available, which namely differs from the 2020 Handbook by including effective revisions, such as: non-assurance services, fees, and objectivity of an engagement quality reviewer. If not already doing so, TFAC should be raising awareness and educating members on the revisions that are effective so they may properly apply the standards.

Current Status: Review & Improve

Under the Ministry of Finance’s Regulation of the Ministerial Division Comptroller B.E. 2557, the Comptroller General’s Department (CGD) is responsible for setting public sector accounting standards in Thailand. Since 2018, CGD has issued several Thai Public Sector Accounting Standards and Policies (TPSAS), which are national standards that reference IPSAS and are on a partial-accrual basis.

TFAC reports to be using its best endeavors by providing CGD with policy recommendations to support adoption of all IPSAS, as well as participating in CGD’s Accounting Standards Committee.

TFAC’s advocacy efforts around IPSAS adoption are positive and the TFAC seems to be using its best efforts to fulfill the SMO 5 requirements. The TFAC should continue to identify opportunities for dialogue and engage with the CGD on the importance of adopting the latest version of accrual-basis IPSAS—the 2021 IPSASB Handbook is in effect as of January 2021. Adoption of accrual IPSAS as issued by the IPSASB would ensure application of global best practice. It may also find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful for any advocacy and/or educational activities it offers.

Current Status: Sustain

The TFAC is responsible for establishing and implementing an investigation and discipline (I&D) system, under the oversight of the Accounting Profession Supervision Committee. Accordingly, in 2004 the TFAC operationalized a Committee on Professional Ethics (“The Committee”) which is charged with the overall I&D procedures, which are outlined in its SMO Action Plan. As per the Accounting Professional Act B.E. 2547 (2004), the responsibilities of the committee include issuing warnings, probations, and suspensions, and removing licenses and registrations. The Act, however, prohibits the TFAC from imposing certain penalties such as issuing fines and ordering further trainings. Appeals by TFAC members can be made to the APRC, which was developed to act as an oversight body of the TFAC.

The Committee indicates that its procedures are active and operational. As of June 2023, 34 allegations of misconduct are undergoing a preliminary review in accordance with the Accounting Profession Act prior to submission to the Committee for investigation; 29 allegations of misconducts are being passed on to investigation sub-committees; and 23 allegations of misconduct are currently being investigated before being referred to the Committee for possible sanctioning. As of June 2023, in total, there have been penalties issued to174 professionals who were found guilty of misconduct. The committee issues a quarterly report on its findings and has provided procedural guidance so that members understand the process in place.

The Committee maintains a process to review its I&D processes on an annual basis to ensure it meets the requirements of SMO 6. The TFAC identified two gaps due to the new Personal Data Protection Acts (PDPA) which became effective in 2022. As a result, efforts are currently underway to revise the procedures for public disclosure to align them with requirements of the law.

The TFAC indicates that it plans to recruit additional skilled staff to join the investigative subcommittees between 2021 – 2025.

I&D procedures that meet the SMO 6 benchmark are important to maintaining public trust and confidence in the profession. The TFAC has has outlined I&D procedures that largely correspond with the SMO 6 requirements, but a gap persists with respect to the results of QA reviews, which is an important source of information of potential non-compliance. As TFAC is investing resources to strengthen its QA review system, it is recommended that closing the gap between the two systems is addressed as part of that process.

Current Status: Execute

The Accounting Professions Act B.E. 2547 of 2004 authorizes the TFAC to develop accounting standards in Thailand under the supervision of the Accounting Profession Supervision Committee. The Thai Accounting Standards-Setting Committee of the TFAC develops Thai accounting standards known as Thai Financial Reporting Standards (TFRS) by adopting all IFRS with a one-year delay from the equivalent IFRS Standard’s effective date, with the exception of standards relating to financial instruments and first time adoption of IFRS. As detailed by the IFRS Foundation, TFAC has maintained an ongoing adoption & translation policy and

TFAC has communicated that TFRS has now transitioned to the 2022 edition of IFRS. In the year 2022, Thailand officially introduced IFRS17, referred to locally as TFRS17, through publication in the Royal Gazette. This standard is slated to take effect on January 1, 2025, with the allowance for early adoption.

Additionally, to support the implementation of the standards, the TFAC conducts trainings on a regular basis to ensure professional accountants, regulators, academics, and others understand the accounting standards. Other implementation activities carried out by the TFAC include: conducting Train-the-Trainer workshops for accounting lecturers, and preparing a TFRS implementation guide in Thai that summarizes TFRS and provides illustrative case studies.

The institute also notes that it raises awareness of IASB activities by notifying its members and other interested stakeholders about all new, proposed, and revised IFRS and is active in the international standard-setting process and provides comments to exposure drafts issued by the IASB.

In 2023, TFAC has also introduced the national accounting standard known as TFRS for non-publicly accountable entities, which primarily emphasizes cost measurement while integrating certain fair value alternatives, such as Fair Value Measurement and Consolidated Financial Statements.

Given the legal and regulatory framework for adoption of financial reporting standards, the TFAC is using its best efforts to fulfill the SMO 7 requirements, including keeping pace with changes and translations as feasible to standards and supporting implementation. The TFAC is also encouraged to include examples of how it is supporting SMPs and SMEs with the implementation of IFRS for SMEs, which should be beneficial to their enterprises.

Current Status: Sustain