Federation of Accounting Professions
Member | Established: 1948 | Member since 1978
The Accountant Association of Thailand was originally established in 1948, then renamed the Institute of Certified Accountants and Auditors of Thailand in 1975 before assuming its current name, the Federation of Accounting Professions (FAP) in 2004.
Under the Accounting Professions Act B.E. 2547 of 2004, the FAP is the only professional accountancy organization in Thailand and is responsible for regulating the accountancy profession under oversight from the Accounting Professions Regulatory Commission. The FAP aims to unite all professional accountants for the benefit of professional development and livelihood. Its responsibilities include: (a) establishing initial professional development and continuing professional development requirements for the accounting profession; (b) supporting the unity and honor of members including providing for the welfare and benefits among members; (c) setting accounting and auditing standards; (d) establishing ethical requirements for professional accountants and monitoring the behavior and operation of registered members in accordance with professional ethics, such as establishing an investigative and disciplinary mechanisms; (e) issuing, suspending, and revoking professional accountants registration and license; (f) certifying accounting degrees or certificates to benefit member’s application; (g) certifying the training curriculum for professional accountants; (h) assisting, recommending, and disseminating knowledge about the accounting profession to the public; (i) providing advice and recommendations to the government regarding policies and issues related the accounting profession; (j) issuing the regulations of the FAP; and (k) acting as the representative of the accounting profession. The FAP is also responsible for establishing a quality assurance review system for its members.
The FAP has been under the Royal Patronage of His Majesty the King since September 6, 2005. The FAP awards the Certified Public Accountant designation and membership is mandatory for all auditors and bookkeepers. In addition to being a Member of IFAC, the FAP is also a member of the ASEAN Federation of Accountants.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
- SMO 1: Quality Assurance
Both the FAP and the Securities and Exchange Commission (SEC) share responsibility for establishing quality assurance (QA) review systems in Thailand.
The FAP has been conducting its QA reviews through subcommittees that are approved by the FAP Board to function for three-year terms. Since 2012, the FAP 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 FAP reports that the establishment of a new subcommittee is ongoing.
Although the subcommittees have had different names, their responsibilities have remained the same, which include educating and monitoring auditors and firms on the implementation of TSQC 1, and supervising the QA team in ensuring that auditors and firms maintain quality control systems. FAP’s QA review system covers audits of entities established under the Accounting Act B.E. 2543 (2000). The institute conducted an assessment of its QA system against the requirements of SMO 1 and identified that its system does not adopt a cycle-based approach, there is a lack of human resources available to conduct QA reviews, and the system is not linked with its I&D mechanisms.
The FAP reports that in 2013, a committee was appointed by the Accounting Profession Supervision Committee, which was established under the Accounting Profession Act B.E 2547 (2004), to see if it was feasible to establish an independent audit oversight organization in Thailand. Although it was agreed in principal that such organization should be established, as of November 2017, there has been no further progress on this initiative. As a result, the FAP reports that although there are two QA review systems, it collaborates with the SEC to ensure there is no duplication of reviews.
In November 2014, the FAP launched a capacity building project with the SEC to improve the quality of audit work and to increase the number of listed auditors and firms that are qualified and ready for filing with the SEC. As of this assessment, a total of four training classes have been conducted reaching 118 auditors representing 62 different firms. Additionally, a memorandum of understanding was signed with seven audit firms to carry out the second phase of this project which includes a mentorship component. This project is slated to conclude at the end of 2017.
The FAP conducts trainings and workshops on TSQC 1, and the institute has developed a Practical Manual for Quality Control System for small and medium-sized practices as well as a guide for sole practitioners. As of November 2017, 29 training sessions have been conducted for over 2,600 practitioners. The FAP provides updates related to audit quality issues via its website and newsletters and holds workshops to share experiences from practitioners who have implemented TSQC 1.
In the next update of its SMO Action Plan, the FAP is encouraged to report on its efforts to address gaps identified during the self-assessment of its QA system against the requirements of SMO 1 to ensure that the resulting system is aligned with the requirements.
- SMO 2: International Education Standards
The Accounting Professions Act B.E. 2547 of 2004 authorizes the FAP to promote education, training, and research related to the accounting profession in Thailand. To that effect, the Education and Technology Committee of the FAP has established initial professional development (IPD) and continuing professional development (CPD) requirements and programs for professional accountants. As of March 2018, the FAP has translated and incorporated the revised IES into its IPD and CPD program.
Since 2014, the FAP has engaged with local universities to evaluate the quality of accounting programs being offered to students, and to approve and accredit those programs. The FAP reports that it has hosted public seminars on the revised IES and it has completed updating its curriculum to reflect the newly issued standards.
In the next update of its SMO Action Plan, the FAP is encouraged to provide updates on efforts to participate in the international standard-setting process.
- SMO 3: International Standards on Auditing
Under the Accounting Professions Act B.E. 2547 of 2004, the FAP is directly responsible for establishing auditing standards in Thailand. The FAP reports that, as of November 2017, the 2016 ISA have been translated and adopted as the Thai Standards on Auditing.
Through its Auditing Profession Committee, the institute maintains ongoing processes to review all pronouncements issued by the IAASB to translate and adopt the latest standards in Thailand. These processes include continuously reviewing and translating pronouncements by the IAASB into Thai, sharing them for public consultation, approving the final standards, and disseminating the standards to its membership.
The FAP has directly translated and published into Thai the Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services for the public. The FAP reports that 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 into the Thai language.
The FAP reports that 10 separate trainings and seminars on the 2016 ISA have been conducted in 2016, with two courses being conducted in collaboration with the Bank of Thailand and the Office of Insurance Commission. The FAP also provides updates on IAASB pronouncements to members via member meetings, website updates, and the FAP newsletter. Lastly, the FAP participates in the international standard-setting process by reviewing and commenting on IAASB exposure drafts.
- SMO 4: Code of Ethics for Professional Accountants
Under the Accounting Professions Act B.E. 2547 of 2004, the FAP is responsible for setting ethical requirements for all professional accountants, and reports that as of November 2017, it has adopted the 2014 IESBA 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 significant guidance related to the Code for its members, and developing an Ethics Education presentation to be used at public seminars. The FAP conducts these seminars on an ongoing basis across the country in order to educate its members.
Lastly, the FAP participates in the international standard-setting process by reviewing and responding to IESBA-issued exposure drafts.
In the next update of its SMO Action Plan, the FAP is encouraged to consider reviewing the latest IESBA Code of Ethics issued in 2016 for adoption. Although the institute reports that it has conducted training seminars on newly issued and translated Codes, it is encouraged to consider developing additional continuing professional development that is relevant to ethical requirements and issues members may face and encouraging universities to incorporate ethics-related material in their curricula if they do not already do so.
- SMO 5: International Public Sector Accounting Standards
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. The FAP reports that the CGD has identified a total of 19 IPSAS that are relevant to the Thai public-sector. As of November 2017, the CGD has adopted nine Thai Public Sector Accounting Standards, which are developed in line with IPSAS issued in 2011. The CGD is in the process of considering the adoption of the remaining 10 IPSAS it has identified as relevant to the Thai public sector. The expected completion date of this initiative has not been established.
The FAP support the CGD by translating the standards into Thai reports that it is actively promoting and encouraging the continued adoption and implementation of IPSAS in Thailand to the CGD through a number of actions such as providing a glossary of terms as reference to assist with the translation of IPSAS into Thai, offering trainings, making policy recommendations to the CGD, and participating on the CGD’s Accounting Standards Committee.
In the next update of its SMO Action Plan, the FAP is encouraged to provide additional examples of activities and initiatives it is undertaking to promote public-sector accounting standards in Thailand.
- SMO 6: Investigation and Discipline
The FAP is responsible for establishing and implementing an investigation and discipline (I&D) system in Thailand for its members, under the oversight of the Accounting Profession Supervision Committee. Accordingly, in 2004 the FAP operationalized a Committee on Professional Ethics which is charged with the I&D of FAP members. However, as per the Accounting Professional Act B.E. 2547 (2004), the committees’ powers are limited to only issuing warnings, probations, suspensions, and revoking of licenses and it does not have the capacity to fine or impose further training as penalties.
In addition, the Committee maintains a process to review its I&D processes on an annual basis to ensure it meets the requirements of SMO 6 and issues quarterly reports on the findings. The FAP conducted an assessment of its I&D system against the requirements of SMO 6 and identified that QA reviews are not linked with the system.
In 2016, the Professional Ethics Committee imposed penalties within its mandate, on 78 professional accountants who were found guilty of misconduct.
The FAP has stated plans to recruit additional skilled staff to further enhance the operations of the I&D system throughout the 2015–2017 period.
In the next update of its SMO Action Plan, the FAP should indicate specific actions taken to address the identified gap in the I&D system to ensure that the overall system is aligned with the requirements of SMO 6.
- SMO 7: International Financial Reporting Standards
The Accounting Professions Act B.E. 2547 of 2004 authorizes the FAP to develop accounting standards in Thailand under the supervision of the Accounting Profession Supervision Committee. The FAP maintains an ongoing process to ensure updates from the IASB are translated and incorporated into the current standards.
The FAP reports that, as of November 2017, Thai Financial Reporting Standards (TFRS) are aligned with the 2016 IFRS and there are plans to adopt IFRS for SMEs by 2018. With plans to adopt IFRS for SMEs, the FAP reports that there are initiatives underway to develop various types of trainings on the standards.
The FAP builds awareness of the TFRS and activities of the IASB by notifying its members and other interested stakeholders about all new, proposed, and revised IFRS. Additionally, to support the implementation of the standards, the FAP conducts training seminars and workshops on a regular basis to ensure professional accountants, stakeholders, regulators, and academics understand the accounting standards. Other implementation activities carried out by the FAP 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 that are relevant for the Thai environment. The institute also notes that it is active in the international standard-setting process and provides comments to exposure drafts issued by the IASB.
In the next update of its SMO Action Plan, the FAP is encouraged to report on its efforts to finalize the adoption of IFRS for SMEs.
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