All companies in Thailand must have their financial statements audited in accordance with the auditing standards issued by the Federation of Accounting Professions (FAP). The April 2007 issue of "Capital Thailand - Corporate Governance Updates" published by the Securities and Exchange Commission of Thailand (SEC) reports that the SEC, the Bank of Thailand, and the FAP signed in January 2007 a memorandum of understanding to provide support to the FAP in its convergence efforts. However, no further information as to Thailand's compliance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board is publicly available.

General Overview

In April 2003, the World Bank launched a Country Development Partnership on Financial and Corporate Competitiveness (CDP-FC) which was later endorsed by the Bank of Thailand (BoT) and the Ministry of Finance. The immediate objective of the CDP-FC, as stated in the World Bank's 2006 Completion Report, was to introduce short-term reforms in order to alleviate the consequences of the financial crisis. However, the CDP-FC also envisioned medium term structural reforms which would enhance the competitiveness of the financial and corporate sectors. Component 5 of the CDP-FC titled "Market Discipline and Corporate Governance" involved, among other issues, measures to be taken to improve accounting and auditing standards. According to the above-mentioned report, the implementation of this component was rated as "satisfactory." The April 2007 issue of "Capital Thailand - Corporate Governance Updates," published by the Securities and Exchange Commission of Thailand (SEC), reports that in January 2007 the SEC, the BoT, and the FAP signed a memorandum of understanding "to support the FAP's role in developing Thai accounting and auditing standards in line with changing international standards" by providing a loan in the amount of 4 million baht (approx. USD114,285). However, there is no further publicly available information as to the compliance of Thai auditing standards with the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board.

The 2006 self-assessment prepared by the FAP as part of the International Federation of Accountants (IFAC) Member Body Compliance Program provides information on the regulatory and standard-setting arrangements in Thailand. According to the self-assessment, all companies in Thailand must have their annual financial statements audited in accordance with the auditing standards issued by the FAP. In addition to this requirement, listed companies should have their quarterly financial statements audited, and banks and other financial institutions must submit their semi-annual audited financial statements. The FAP was established in January 2005. Prior to its establishment, accounting standards were issued by the Institute of Certified Accountants and Auditors of Thailand. The FAP's responsibilities include issuance of accounting and auditing standards, setting and enforcement of ethic requirements, and the supervision of accounting profession. According to the 2006 FAP self-assessment, the Thai auditing standards are "based on and similar to those issued by the IFAC." The FAP is listed as a member on the IFAC website.

The 2006 FAP self-assessment states that the SEC monitors compliance with accounting and auditing requirements on a regular basis and ensures that noncompliance with reporting requirements is corrected. The 2006 World Bank report observed that the SEC "has improved its close monitoring of audited financial statements and annual registration statements of listed companies to ensure that accounting practices of listed companies are in compliance with the Thai accounting standards and to prevent companies from misappropriating their assets through connected transactions. Non-complying companies are required to make appropriate amendments or sanctions are imposed" (p. 31). In addition, the SEC approves auditors for listed companies based on quality reviews of auditors' performance.

The BoT regulates reporting practices of banks and similar financial institutions and enforces compliance with accounting and auditing requirements. According to the 2006 FAP self-assessment, appointment of auditors for entities regulated by the BoT requires the BoT's approval, although the BoT does not participate in the regulation of the audit profession. The Department of Insurance of the Ministry of Commerce, which regulates insurance companies in Thailand, has no role in regulation of the audit profession or in setting of accounting standards. However, insurance companies must submit to the regulator a second set of financial statements prepared according to the accounting practice guidelines for insurance companies that are specific to the insurance industry.

The Principles

ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 210 Terms of Audit Engagements (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 230R Documentation (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 300 Planning an Audit of Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 320 Audit Materiality (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 500 Audit Evidence (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 505 External Confirmations (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 510 Initial Engagements — Opening Balances (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 520 Analytical Procedures (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 540 Audit of Accounting Estimates (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 550 Related Parties (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 560 Subsequent Events (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 570 Going Concern (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 580 Management Representations (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 600 Using the Work of Another Auditor (effective)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 610 Considering the Work of Internal Auditing (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 620 Using the Work of an Expert (effective 2005)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 710 Comparatives (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.

ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

II

There is insufficient publicly available information as to Thailand's compliance with this principle.