Thai Standard on Quality Control
FAP set out Thai Standard on Quality Control (TSQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, with effective date on 1 January 2014. This standard deals with a firm’s responsibilities for its system of quality control designed to provide it with reasonable assurance that (i) the firm and its personnel comply with professional standards and applicable legal and regulatory requirements and (ii) reports issued by the firm or engagement partners are appropriate in the circumstances. This will enhance the audit quality, promote public trust in both financial reporting and auditing profession, as well as reduce the risks of auditing failures which will negatively affect capital market and overall economy.
IFAC set out the International Standard on Quality Control 1, of which TSQC1 is based on, since 2005, with amendments in 2009. In Thailand, draft TSQC1 was disseminated in 2010 and promulgated in the beginning of 2011. The effective date was 1 January 2014 but earlier adoption was encouraged. Thai audit firms and auditors should be well-prepared in advance to establish or improve their existing quality system to comply with this standard.
Elements of Quality Control System – Summary
- Leadership responsibilities for quality within the firm – The firm shall establish policies and procedures designed to promote an internal culture recognizing that quality is essential in performing engagements. Such policies and procedures shall require the firm’s management to assume ultimate responsibility for the firm’s system of quality control.
- Relevant ethical requirements – The firm shall establish policies and procedures designed to provide it with reasonable assurance that the firm and its personnel comply with relevant ethical requirements.
- Acceptance and continuance of client relationships and specific engagements– The firm shall establish policies and procedures for the acceptance and continuance of client relationships and specific engagements.
- Human resources – The firm shall establish policies and procedures designed to provide it with reasonable assurance that it has sufficient personnel with the necessary competence, capabilities, and commitment to ethical principles.
- Engagement performance – The firm shall establish policies and procedures designed to provide it with reasonable assurance that engagements are performed in accordance with professional standards and applicable legal and regulatory requirements.
- Monitoring – The firm shall establish a monitoring process designed to provide it with reasonable assurance that the policies and procedures relating to the system of quality control are relevant, adequate, and operating effectively.
Effective Date
According to FAP’s announcement no. 9/2554, TSQC1 is effective from by 1 January 2014.
Work on Audit Quality Assurance
Following the promulgation of the TSQC1, FAP Board Announcement no. 2/2555 dated 15 March 2012 has approved the appointment of the Subcommittee of Development and Supervision on Quality Control Review of Auditors and its adviser to carry out tasks which was emphasis on raising awareness of auditors and firms about TSQC1.
The said Subcommittee completed its term in 2014. The Audit Quality Oversight Subcommittee was established on 22 March 2016 with a more focus on QA monitoring activities. This Subcommittee completed its term in 2017 and the present Subcommittee of Promote and Development of Audit Quality was established on 24 August 2017 by FAP Board Announcement no. 22/2560.
View of Auditors and its adviser as well as its roles and responsibilities as follows.
