Lao auditing firms have failed to get jobs associated with the establishment of the first stock market as they are unable to deliver services of an international standard.
Stock market Chairman and CEO Mr Dethphouvang Mounlarat last week urged local auditing firms to improve their services to an international level so they could be hired by companies listed on the Lao Securities Exchange.
At present, the stock market accepts the work of few auditing companies operating in Laos including KPMG and PricewaterhouseCoopers.
The market is preparing to accredit more international auditing companies in the near future, he told a group of journalists at an Economic Media and Securities Market seminar held on January 19 at the Lao-Japan Human Resources Development Institute.
Public companies wishing to list on the Lao Securities Exchange must prove that they are operating transparently, and only auditing firms can provide company owners with the required accurate financial statements.
There are many auditing firms in Laos, with most provide business consulting services to local and international companies.
Mr Dethphouvang said the stock market cannot accept the work of Lao auditing firms because they have not yet shown they can provide services of an international standard.
“We acknowledge them as auditing companies in Laos but not on the world stage so we cannot accept their work,” he said, adding that Lao companies should learn from their internationally accredited counterparts.
He said auditing companies must perform their duties honestly and ethically to build up confidence among contractors.
This includes desisting from helping company management avoid paying taxes or hide income so they can embezzle money, Mr Dethphouvang emphasised.
Transparency in the operations of listed companies is essential to protect investor interests.
“The companies listed on the stock market have shown themselves to be sound because they have had to pass a strenuous examination process,” he said.
At present, EDL Generation and BCEL are the only two public companies listed on the Lao Securities Exchange, which began trading on January 11.
As with other stock markets in the world, the Lao Securities Exchange not only facilitates stock transactions but also the transparent operation of companies, which is necessary for investor confidence.
The Lao government is encouraging people to invest in stocks. By selling shares to the public, state and private firms can raise capital.