The Development of Laws to Prevent Fraudulent Financial Statement Manipulation by Listed Companies in the Stock Exchange of Thailand

Abstract

This research article aims to study (1) the concepts and principles regarding fraudulent financial statement manipulation by listed companies in the Stock Exchange, (2) legal measures to prevent financial statement manipulation of listed companies in the Stock Exchange of Thailand, compared with foreign laws, (3) problems and impacts arising from fraudulent financial statement manipulation by listed companies in the Stock Exchange, and (4) guidelines for amending and developing laws to prevent fraudulent financial statement manipulation by listed companies. This is a qualitative research study, with data collected from books, articles, theses, research reports, and relevant documents.

The study found that the Securities and Exchange Act of B.E. 2535 (1992) does not specifically establish an independent regulatory body to oversee and audit accounting practices. This results in issues related to the expertise of auditors and a lack of unity, as Thai law does not prioritize measures addressing conflicts of interest that could affect the independence of auditors. The Capital Market Supervisory Board does not target the oversight of accounting practices in the Securities and Exchange Act, even though they are crucial for ensuring investor confidence.

The researcher suggests that the Securities and Exchange Act of B.E. 2535 (1992) be amended by adding Section 8/1 to establish a supervisory office for the accounting practices of listed companies. Section 8/2 should define the duties and powers of the office, Section 62/1 should issue ministerial regulations on auditor independence and prohibited activities, and Section 62/2 should impose penalties on auditing offices if their auditors violate this proposed law.