Auditors are requesting the Securities and Exchange Commission (SEC) exclude newly listed companies from declaring dubious transactions or issues that could have an impact on their balance sheets.
The auditors agreed the regulator should allow a waiver as most newly listed companies are small firms and they could delay going public if the SEC insists on adopting the accounting change as scheduled, said Chanchai Chaiprasit, a partner at PwC Thailand.
Companies planning to list on bourses could take longer to prepare, a process that currently averages one to two years. Family-owned companies often conduct inaccurate accounting, leading to problems that could lengthen their listing process, he said.
To better protect shareholders, the SEC has asked listed companies this year to declare unusual transactions that could have significant impacts on their balance sheets in auditors' notes on the front page of financial statements. The request could be extended to newly listed companies.
The declaration of unusual transactions on the front page of financial statements is meant to make financial reports more transparent, he said.
PwC applies the same auditing standards to both listed and non-listed companies. The firm talks with companies and internal auditors to rectify financial statements if it has any questions, Mr Chanchai said.
An accounting firm will state whether an audit complies with international standards if a financial report cannot be corrected or the accounting firm did not coordinate its correction.
PwC has a policy to stop audits in cases where financial reports are unacceptable, he said.
Financial auditing has become more complicated in line with the changing business environment, as auditors need advanced equipment to analyse data and find shortcomings in financial reports, Mr Chanchai said.
Auditors must be skilled and cautious when auditing financial statements because of their complexity, he said.
Prakit Boonyatthiti, SEC assistant secretary-general, said the regulator has not decided whether it will grant newly listed companies a waiver, as it is awaiting a response from listed firms after they file financial reports for the final quarter.