Thailand

Financial reporting requirements in Thailand are outlined in a number of laws, which include the Accounting Act B.E. 2543 of 2000, the Securities and Exchange Act B.E. 2535 of 1992, the Bank of Thailand Act B.E. 2485, the Financial Institutions Business Act B.E. 2551, and the Insurance Commission Act B.E. 2550.

The Accounting Act B.E. 2543 of 2000 establishes financial reporting requirements for entities, which include registered partnerships, limited companies, public limited companies established under Thai law, joint ventures, and foreign entities operating in Thailand under the revenue code. Under the act, financial statements for these entities must be completed in accordance with Thai Financial Reporting Standards (TFRS) and must be audited by a certified public auditor in accordance with the Thai Standards on Auditing (TSA). Registered partnerships whose total revenue, assets and registered capital fall below a certain threshold are not required to be audited. Non-Publicly Accountable Entities (NPAE) are required to follow TFRS for NPAE.

Under the Accounting Professions Act B.E. 2547 of 2004, the Federation of Accounting Professions (FAP) is responsible for developing and issuing accounting and auditing standards in Thailand. The Thai Accounting Standards-Setting Committee of the FAP has adopted all IFRS Standards 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. The FAP reports that TFRS are aligned with the 2016 version of IFRS. Thailand is in the process of adopting IFRS for SMEs, which will be known as the Thai Financial Reporting Standard for SMEs. The issuing of accounting standards in Thailand requires the approval of the Accounting Professions Regulatory Commission and publication in the Royal Gazette. The FAP’s Auditing Profession Committee develops the TSA, which are in accordance with the latest version of International Standards on Auditing issued by the International Auditing and Assurance Standards Board.

The Securities and Exchange Act B.E. 2535 of 1992 establishes the Securities and Exchange Commission (SEC) as the supervisory agency that regulates the Thai capital market. All entities regulated by the SEC are to prepare financial statements per the TFRS, and the SEC may sanction entities that do not adhere to the standards. All entities under this act are required to be audited using TSA by an SEC-approved auditor.

The Bank of Thailand Act B.E. 2485 regulates and sets financial reporting requirements for the Bank of Thailand (BoT). In addition, the Financial Institutions Business Act B.E. 2551 empowers the BoT to regulate and establish financial reporting requirements for all financial institutions including commercial banks, finance companies, and credit foncier companies. Both banks and financial institutions must prepare financial statements using TFRS, and these statements are to be audited by a BoT-approved auditor using TSA.

The Insurance Commission Act B.E. 2550 authorizes the Office of Insurance Commission to regulate insurance companies and its brokers and agents, and sets financial reporting requirements for the insurance companies. Insurance companies are also required to prepare financial statements using TFRS and these statements are to be audited using TSA.

In Thailand, professional accountants are defined as individuals who provide services in bookkeeping, auditing, managerial accounting, accounting system design, tax accounting, accounting education and technology, or other accounting services prescribed by the ministerial regulations.

According to the Accounting Professions Act B.E. 2547 of 2004, the Federation of Accounting Profession (FAP) is responsible for regulating the accountancy profession under oversight from the Accounting Professions Regulatory Commission (APRC).

The responsibilities of the FAP include: (a) establishing initial professional development (IPD) and continuing professional development requirements for the accountancy 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 (I&D) mechanism; (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 mechanism for its members, and awards the Certified Public Accountant designation.

The APRC, established under the Accounting Professions Act, is responsible for (i) supervising the functions and activities of the FAP; (ii) approving the regulations of the FAP and accounting standards as adopted by the FAP; and (iii) considering appeals by FAP members against disciplinary measures by the Professional Ethics Committee.

Licensing requirements for both certified public accountants and bookkeepers are set out in the Accounting Professions Act, which requires both categories of professional accountants to register and be members of the FAP. The Act also sets out the penalties that can be imposed and outlines the responsibilities of the FAP’s Committee on Professional Ethics, which is to oversee the overall operation of an I&D mechanism. The committee issues warnings, probations, and suspensions, and is also responsible for revoking licenses and registrations. The Act prohibits the FAP from imposing certain penalties such as issuing fines and ordering further trainings.

In addition, under the Securities and Exchange Act B.E. 2535 of 1992, the Securities and Exchange Commission (SEC) has direct responsibility for the supervision of the auditors of securities issuers and entities under SEC supervision, and carries out the regulation and monitoring of auditors and their work. The SEC supervises and monitors audit firms’ quality control systems and ensures that accounting and auditing standards are applied. In addition, it has also set up an Auditor Disciplinary Steering Group to ensure sharing of information and fair assessment of auditor’s performance.

There is no independent audit oversight arrangements in Thailand. The Federation of Accounting Professions (FAP) under the oversight of Accounting Professions Regulatory Commission is responsible for regulating the audit profession.

Under the Accounting Professions Act B.E. 2547 of 2004, the FAP is responsible for (i) setting auditing standards; (ii) establishing qualification requirements for prospective auditors; (iii) issuing practicing licenses to auditors; and (iv) monitoring the behavior of auditors by establishing ethical requirements and an investigative and disciplinary mechanism. The FAP is also responsible for establishing a quality assurance review system for its members. The FAP awards the Certified Public Accountant designation to auditors and membership is mandatory for auditors.

Established under the Securities and Exchange Act B.E. 2535 of 1992 as an independent public agency, the Securities and Exchange Commission (SEC) has direct responsibility for supervision of the auditors of securities issuers and entities under SEC supervision (listed companies, brokers, dealers, asset management companies and collective investment schemes), and carries out the regulation and monitoring of auditors and their work. The SEC supervises and monitors audit firms’ quality control systems and ensures that accounting and auditing standards are applied. In addition, the Central Bank of Thailand requires that auditors of all banks and financial institutions must be those approved by the SEC as auditors in the capital market.

The FAP reports that in 2013, a committee was appointed by the Accounting Profession Supervision Committee, which was established under the Accounting Profession Act 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.

The SEC is a member of the International Forum of Independent Audit Regulators.

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.

The Federation of Accounting Professions (FAP) and the Securities and Exchange Commission (SEC) both operate separate quality assurance (QA) review systems in Thailand.

Since 2012, FAP has been conducting QA reviews through its Audit Quality Oversight Subcommittee (AQOS). The committee’s responsibilities include educating and monitoring auditors and firms on the implementation of Thai Standard on Quality Control (TSQC 1), which is a direct translation of ISQC 1, and supervising the QA team in ensuring that auditors and firm maintain quality control systems. In June 2017, the AQOS completed its three-year term, and the FAP reports that the establishment of a new committee is currently in progress. The FAP 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 to its I&D mechanisms.

Under the Securities and Exchange Act of 1992, the SEC is responsible for regulating and supervising auditors of listed companies. Audit firms in Thailand are inspected to ensure that appropriate controls are in place, and are required to implement TSQC 1. The SEC is also responsible for inspecting the engagement files of the auditors to ensure that they comply with relevant auditing and accounting standards set by the FAP.

The FAP reports that although there are two QA review systems, it collaborates with the SEC to ensure there are no duplication of reviews.

Current Status: Partially Adopted

The Accounting Professions Act B.E. 2547 of 2004 authorizes the Federation of Accounting Professions (FAP) to establish initial professional development and continuing professional development requirements and programs for professional accountants in Thailand.

As of March 2018, the FAP reports it has translated and incorporated the revised IES into its program.

Current Status: Adopted

Under the Accounting Professions Act B.E. 2547 of 2004, the Federation of Accounting Profession (FAP) has direct responsibility for establishing auditing standards in Thailand. The FAP reports that it has established an ongoing process to review, translate, and adopt new and revised pronouncements of IAASB. As of November 2017, the 2016 ISA have been translated and adopted as the Thai Standards on Auditing.

Current Status: Adopted

The Accounting Professions Act B.E. 2547 of 2004 authorizes the Federation of Accounting Profession (FAP) to set ethical requirements for all professional accountants in Thailand. FAP reports that it has translated and adopted the 2014 IESBA Code of Ethics. No plans have been indicated to adopt the 2016 IESBA Code, including the NOCLAR standard.

Current Status: Partially Adopted

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 Federation of Accounting Professions (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 CGF 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. The expected completion date of this initiative has not been established. IPSAS are translated into Thai by the FAP.

Current Status: Partially Adopted

In Thailand, the Federation of Accounting Professions (FAP), the Securities and Exchange Commission (SEC), and the Accounting Professions Regulatory Commission (APRC) share responsibility in the investigative and disciplinary (I&D) process for professional accountants in Thailand.

The Accounting Professions Act B.E. 2547 of 2004 sets out the penalties that can be imposed on professional accountants as well as the overall I&D process. The Act authorizes the FAP’s Committee on Professional Ethics to oversee the overall operation of the I&D system, and the responsibilities of the committee include issuing warnings, probations, and suspensions, and removing licenses and registrations. The Act, however, prohibits the FAP from imposing certain penalties such as issuing fines and ordering further trainings. Appeals by FAP members against disciplinary measures by the Committee can be made to the APRC, which was developed to act as an oversight body of the FAP. 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 I&D process.

Under the Securities and Exchange Act B.E. 2535 of 1992, the SEC has direct responsibility for the supervision of the auditors of securities issuers and entities under SEC supervision (listed companies, brokers, dealers, asset management companies and collective investment schemes), and carries out the regulation and monitoring of auditors and their work. The SEC has set up an Auditor Disciplinary Steering Group to ensure sharing of information and fair assessment of auditor’s performance. The group is also responsible for imposing sanctions on auditors who fail to comply with relevant rules and regulations. It is unclear if the I&D system established by the SEC meets the requirements of SMO 6.

Current Status: Partially Adopted

The Accounting Professions Act B.E. 2547 of 2004 authorizes the Federation of Accounting Professions (FAP) to develop accounting standards in Thailand under the supervision of the Accounting Profession Supervision Committee, which is an independent entity.

The Thai Accounting Standards-Setting Committee of the FAP has adopted all IFRS Standards 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. Thai accounting standards are known as Thai Financial Reporting Standards (TFRS), and the FAP reports that they are aligned with the 2016 version of IFRS.

Thailand has maintained an ongoing process to converge TFRS with IFRS. As mentioned above, the FAP maintains a policy that IFRS adopted in Thailand is to be effective no later than one year from the IASB’s effective date, and the institute reports that it has maintained ongoing processes to adopt the latest standards as they are issued.

The FAP is in the process of adopting a new accounting standard for small and medium-sized entities that is identical to IFRS for SMEs. However, at the time of this assessment, SMEs continue to follow the Thai Accounting Standard for Non-Publicly Accountable Entities which differ from IFRS for SMEs. The FAP reports that IFRS for SMEs has been translated into Thai and is currently undergoing FAP’s adoption due process. The expected effective date of this new standard for SMEs is 2018.

Current Status: Partially Adopted

Relevant Organizations

• Federation of Accounting Professions (FAP)
• Securities and Exchange Commission (SEC)

Relevant Legislation

• Accounting Act B.E. 2543
• Accounting Professions Act B.E. 2547

Relevant Publications

• FAP, Accounting Professions in Thailand, November 2007.
• FAP, SMO Action Plan, April 2018.
• IFIAR, 2016 Member Profile: Kingdom of Thailand, 2016.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Thailand,” March 2017.
• Mazars, “New and Revised Thailand Standards on Auditing,” March 2016
• Mazars, “Thai Financial Reporting Standards for Non-Publicly Accountable Entities,” August 2011.
• World Bank, “Current Status of the Accounting and Auditing Profession in ASEAN Countries,” September 2014.
• World Bank, Report on the Observance of Standards and Codes (ROSC) AA, Kingdom of Thailand, 2008.