SEC puts three auditors on probation

       The Securities and Exchange Commission yesterday sanctioned Kesree Narongdej, the president of the Federation of Accounting Professions, for a questionable audit of Tongkah Harbour Plc (THL).
       Also sanctioned were Tipsuda Chumnanvanichkul of KPMG Phoomchai Audit for her audit of Circuit Electronic Industries, and Prawit Wipusirikup of RSM Thailand, for Datamat Plc.
       The SEC said the three had been placed on two years' probation. Any future ma-terial errors over the next two years could result in revocation of their rights to audit listed companies.
       Prof Kesree, affiliated with AMT Associates, audited THL in 2006, the year the mining company returned to the SET after a trading suspension. THL's 2006 accounts showed a profit of 6.1 million baht, with Prof Kesree offering an unqualified opinion.
       But for the first quarter of 2007, THL reported a loss of 29.5 million baht. A SEC investigation found that THL neglected to book certain mining expenses in 2006, which would have reduced profit to 2 million baht. THL also failed to disclose liabilities of 11.6 million baht in 2006 in debt pre-payment fees. The SEC said Prof Kesree neglected to inquire or highlight the transactions as required under accepted accounting principles.
       Ms Tipsuda audited CIRKIT for the third quarter of 2004. In response to an SEC query, she said reserves of 924 million baht were sufficient to cover potential losses. CIRKIT later amended its statements and increased provisions by 787 million baht, increasing net losses for the quarter to 809 million from 22 million.
       The SEC said Ms Tipsuda failed to seek additional information about the financial position or payment capacity of one of CIRKIT's large debtors before concluding the reserves were sufficient.
       For Datamat, the SEC had ordered it to set aside reserves. An amended statement for 2004 showed added reserves of 21.4 million baht, lifting its net loss to 79.9 million baht from 58.5 million.
       The SEC said Mr Prawit had failed to gather additional data before concluding additional reserves were unnecessary.