The Securities and Exchange Commission (SEC) will require chief executives, chief financial officers and internal auditors of listed companies and those going public to sign off on their firm's financial statements, starting with the 2017 balance sheet, a high-ranking official says.
The move appears to be a pre-emptive measure for chief executives and chief financial officers to take responsibility in the event of damage incurred by falsified financial statements.
They have two years to prepare before the new requirements take effect, SEC assistant secretary-general Prakit Punyashthiti said, adding that the changes should benefit both companies and investors.
Under current rules, only internal auditors are required to endorse financial statements. They alone are penalised when falsified statements are spotted, while chief executives and chief financial officers escape responsibility.
The new requirements are in line with the mission of SEC head Rapee Sucharitakul, who wants to sharpen the watchdog's regulatory teeth.
He said earlier that the agency would fail to achieve its intended outcome if it only held accountable the auditors who are the third line of defence.
An SEC analysis found that 10% of 600 listed companies had financial statements that were rejected by auditors or contained an auditor's notice.
Internal auditors' failure to recognise international standards is mostly to blame for financial statement problems, Mr Prakit said, though he confirmed that some companies also intend to cook the books.
And while companies involved in falsifying financial statements have to face both civil and criminal sanctions, the SEC wants to head off such violations in the early stages instead of addressing them after the fact.
Mr Prakit said the SEC would join with the Stock Exchange of Thailand and other groups to hold training seminars for chief executives, chief financial officers and internal auditors on updated accounting standards and responsibilities under the new requirements.
"The SEC aims to encourage Thai listed firms to comply with international standards for future sustainability, which can help improve their credibility and growth," he said.
In a related development, Mr Prakit insisted that Thailand has an adequate number of auditors to cover all listed firms, which in any case can always contact the SEC for help.
The number of Thai auditors is on a par with Singapore's and Malaysia's, the secretary-general said.