News item | 21-12-2023 | 15:06
Accountants will soon be obliged to report on the quality of statutory audits. They do this on the basis of quality indicators. Stock exchanges and other ‘public interest organizations’ can now request the assignment of an external accountant for an audit report. More large offices will also have to establish a Supervisory Board. This is stated in the accountancy sector bill that has been sent to the House of Representatives. The reason for the law is the recommendations of the Commission for the Future of the Accounting Sector, which was established in 2020.
Minister Kaag: “Accountants fulfill an important public and social task. You must be able to rely on the accountant’s signature. Unfortunately, trust in accountancy is no longer always self-evident. This is due to incidents but also to structural shortcomings. With this law, the government wants to sustainably improve the quality of audits by the accountant.”
Periodic reporting
From now on, accounting firms are obliged to report periodically to the Dutch Professional Organization of Accountants (NBA) on the basis of established quality indicators. The NBA makes the reports public. The aim is to provide insight into aspects of quality and the accountant’s working methods. Stakeholders can see how accounting firms score on certain indicators and in this way make a well-considered comparison. To date, there is insufficient information available to compare the quality of the statutory audit.
Differences between large and small accounting firms are taken into account. The reporting obligation will initially apply to the 6 largest accounting firms. The government will evaluate the operation of the indicators after a period of 2 to 3 years. The other accounting firms will follow afterwards.
Power to designate
The Accounting Sector Amendment Act also ensures that public interest organizations, such as listed companies, if they are unable to contract an accounting firm themselves, can ask the NBA for the assignment of an accounting firm.
Supervision of the statutory audit
Accounting organizations must organize themselves in such a way that they continuously work on improving the quality of statutory audits. This law clarifies the purpose of the quality control system. The AFM can supervise this. More large offices are also required to establish a Supervisory Board.
Quartermasters
On November 21, the quartermasters for the future of the accountancy sector presented their findings in the report “Pressure and Counter Pressure”, where they focused in particular on the necessary cultural change in the sector. This bill is aimed at improving the quality of statutory audits. A number of measures, such as the established quality indicators, are in line with the recommendations in the quartermasters’ report.