Online exclusive: A Q&A with the head of Thai accounting regulator
Thailand, the second-largest economy in the Association of Southeast Asian Nations (ASEAN), has made extraordinary social and economic progress in just one generation. In 2011, it was elevated to upper-middle-income economy status, where its gross national income per capita almost doubled within a decade and poverty significantly declined.
An important feature of Thailand’s business environment are small and medium-size enterprises (SMEs) that make up 99% of businesses in Thailand. These companies employ 85% of the total labour force and contributed 43% of the country’s GDP in 2018. It’s not an overstatement to say that SMEs hold up the Thai economy.
But there’s ambition to grow that number. Part of the Thai government’s national strategy is to increase SME contribution to GDP to 60% by 2037. (According to the World Bank, SMEs account for 90% of businesses worldwide and provide more than 50% of jobs).
But obtaining financing remains a key obstacle for these enterprises, and lack of financing constricts growth. When Chakkrit Parapuntakul took the reins as the president of the Thailand Federation of Accounting Professions (TFAC) in 2017, he knew that equipping SMEs with sound accounting knowledge would be one of his most important agenda items. With proper accounting, business owners will be able to make better business decisions and gain access to funds crucial for their growth.
In an interview with FM magazine in Bangkok, Parapuntakul shared what he’s been working on — equipping SMEs with accounting know-how, promoting management accounting, and improving accounting education in Thai universities. (Also read, "Developing the profession in Thailand," FM magazine, 1 April 2020.)
It has been three years since you first took on the role as president of TFAC. What motivated you to say yes to the job?
Parapuntakul: The key decision for me was when the TFAC executive team told me they wanted to help SMEs, the sector not included in the Stock Exchange of Thailand. At that time, we knew SMEs would be affected by a new accounting standard because we didn’t have enough accountants and auditors for SMEs.
We wanted to bring in experience and knowledge to develop the accounting profession in Thailand because it’s important for the economic development of the country.
What is the role of Thailand’s accounting professionals in driving the country’s economic development?
Parapuntakul: Accounting transactions are getting more complex along with the economic growth in this country. We need to provide financial statements which reflect financial positions and business performance of listed entities in our market. This will benefit both domestic and foreign investors in their investment decisions and help build confidence in the Thai capital market.
To do that, the challenge would be how to develop and enhance accountants’ skills to be able to keep up with changes in business environments that result in these complex accounting transactions. For those in the profession, the challenge would be how can they apply digital technologies in their work.
What has been done to help SMEs?
Parapuntakul: So far we’ve set up software called SME Sai Baijai where SMEs can generate their own accounts online, whether on a computer or a mobile device. Because they have their own accounts, they can generate accounting reports, check inventory, and check their profit and loss in real time.
They can also hire accountants to examine their accounts once a month. The objective is to reduce the cost for SMEs and assist in creating accounting information that meets global accounting standards.
TFAC is also putting emphasis on management accounting in Thailand’s companies. Why?
Parapuntakul: We want to upgrade accountants so that they can be advisers to the CEO and provide the right information to support an organisation’s strategy. We have found that today’s business executives in Thailand may not attach much importance to using management accounting information as a database for business management. Each organisation has opted to use management accounting information differently.
The desirable qualification of a management accountant in Thailand is someone well versed in accounting, finance, technical analysis, and problem-solving skills. They also need to have an eagerness to learn and a readiness to cope with constant changes to be able to help in business planning.
How far along are accountants in Thailand in adapting to these changes?
Parapuntakul: At the moment, there is no question that accountants are aware that they need to keep learning. Otherwise, they may lose their jobs because all the basic functions of accounting are already being executed by a robot or computer software.
They need to upgrade their abilities, like taking on data analytics to make computers generate the information they need, and continue to play the crucial function as an accountant.
You are also advocating for interdisciplinary accounting education in Thai universities. Tell us more.
Parapuntakul: Universities need to equip accountants with the right skills to prepare them for the workplace. The problem right now is that universities lack the necessary knowledge in new technologies. But I have urged universities to offer different ways for students to study, to do online classes. We’ve issued guiding policies and are working with professors to support in various aspects.
Some universities are also trying to integrate other skills into accounting majors, such as software coding. This is because the accounting profession will be impacted by many factors. If we remain in the past in our skills, we cannot survive.
In Thammasat University, they are opening up accounting classes to students from other majors. This is the vision. Universities are being more proactive by changing how and to whom education is delivered. Classes are not just for full-time students now; they are available for part-time learners who still get class credit and can graduate whenever they want to. This is the current trend in Thailand. It’s flexible. It’s about lifelong learning.
— Alexis See Tho (Alexis.SeeTho@aicpa-cima.com) is an FM magazine associate editor.