"Over the past two to three years, more than a half of the listed firms instructed by the SEC to rectify their financial statements were unclear about asset depreciation and doubtful debt allowance. These are internal control issues, which need improvement as a first step towards transparency," Saranya Chindavanig, from the SEC's Accounting Supervision Department, said yesterday.

Small businesses always have a problem in that only one executive makes all the decisions and that seems to present an easy channel for executives to indulge in embezzlement, she said. The problem at bigger companies is that they use inappropriate accounting policies.

The securities watchdog focuses on financial statements and internal control measures because they are integral to the decision-making of investors, she added.

Kesree Naronggdej, president of the Federation of Accounting Professions, urged CEOs and chief financial officers to take responsibility for their company's financial statements.

To standardise financial statements, four more from the current six accounting standards will be implemented by year-end, she said.

Warunee Preedanont, PricewaterhouseCooper's adviser on corporate governance, suggested that listed companies assess fraud risk, as such activity is very harmful if conducted by CEOs or CFOs.

Charnchai Charuvastr, president of the Thai Institute of Directors Association, said some 60 per cent of listed companies' executives were not aware of their responsibilities.

Executives should get an insight into accounting, ensure transparent financial statements, give auditors a free hand and listen to their recommendations, and protect both staff and auditors, he said.

Siriporn Chanjindamanee

The Nation