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Title: The implementation and the effects of the audit committee within the framework of corporate governance in Thailand
Author: Tengamnuay, Kwansagool
Awarding Body: University of Manchester
Current Institution: University of Manchester
Date of Award: 2005
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Due to recent corporate trends towards internationalisation, globalisation and the urgent need for reform generated by the East Asian economic crisis, there is an increased resolve to implement global corporate governance standards in Thailand. A main reform was the requirement for every Thai listed company to establish an audit committee ("AC") by 1999 with the intention of improving the effectiveness of boards and there by the quality of auditing and financial reporting. There is an apparent lack of relevant academic research in this area. It is worthwhile researching a range of issues surrounding corporate governance, focusing in particular on the AC in order to understand its adoption and implementation in practice as well as the benefit it may bring to Thai organisations. This research has sought to obtain evidence about ACs within the framework of corporate governance in Thailand with particular reference to their roles, composition and operations in practice, the major problems resulting from their implementation as well as their effects. To accomplish the research objective, this research has been conducted by using a combination of questionnaire survey and interviews with company chairpersons, chairs of ACs, chief internal auditors, chief financial officers, external auditors, investors and financial analysts. Additionally, a review of documents has been conducted to support the main research approaches. Analysis shows that the major roles, composition and operations of ACs in Thailand are in line with international guidelines, however, there are still some discrepancies with the intended roles, especially in relation to external audit functions. The evidence reveals that the ACs placed greater emphasis on internal control systems including internal audit and review of audit fees than on other roles. There have been several problems in practice that may impair the effects of ACs, such as the difficulty of finding AC members with relevant qualifications, a lack of understanding of AC functions, inadequate experience in accounting or financial matters, insufficient time to perform the duties, lack of independence and inadequate support from management. Nonetheless, the majority of all responding groups perceived that there were positive effects from the establishment of ACs, especially, maintenance and strengthening of internal control systems and the improved quality of the financial reporting process. It can be argued that the AC in most responding companies seems to increase assurance among the agent or principal and other stakeholders, and seems to represent an appropriate symbol that is at the same time useful in fixing the problems within corporate governance mechanisms in Thailand. On the other hand, some ACs did not appear to change the corporate governance of their companies and in some cases were perceived to hinder the work of chief financial officers and external auditors. The degree of effect depends mainly on the attributes of the ACs, especially their independence or knowledge of business, accounting and finance, understanding of AC roles, sufficient time for their operations, adequate AC meetings and received support from company management. Consequently, some companies may not be able to relieve the agency problems and that AC may merely be a standard form of corporate governance introduced in line with institutional theory to comply with requirements. This thesis provides an insight into the implementation and effects of ACs within the framework of corporate governance in Thailand during the period 1999-2002. Due to the very limited number of previous studies, the results provide a better understanding of the overall existence of ACs in Thailand which could provide some suggestions for their development. Moreover, the methodological procedures followed in this study may be encouraged or discouraged in specific research in the future, in particular, in developing countries,
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available