News item | 21-11-2023 | 3:30 PM
The accountancy sector has not made sufficient progress in recent years to regain its authority and trust. The sector must show more willingness to change and increase its self-critical and self-cleaning capacity. This is the conclusion that the quartermasters for the future of the accountancy sector, Marlies de Vries and Chris Fonteijn, reach in their final report ‘Pressure and counter pressure’, which they presented today to Minister of Finance Sigrid Kaag.
Pressure and counter-pressure
The report paints a picture of a sector that is under heavy pressure. Pressure from the controlled company, commercial pressure, time pressure and a steadily growing range of tasks. This requires counter pressure, the quartermasters say. Counter-pressure from the accountant himself and his organization. An independent attitude and professionally critical attitude are essential.
Slow and risk-averse
Although the quartermasters see that many individual professionals are motivated and of good will, they judge that the sector as a whole is slow and risk-averse. It should show more courage to experiment in the areas of innovation, fraud and continuity. This task lies primarily with the management of the accounting organizations. As well as the important task of continuing to put pressure on the continuous process of improving and monitoring the quality of the statutory audit. In addition, middle management should be given ample autonomy to ensure that individual accountants can develop the necessary professionally critical attitude. The strong pressure on employees for output within accounting organizations hinders professionals and invites them to take shortcuts.
The quartermasters emphatically state that the audited organizations also have a role and responsibility in improving the quality of statutory audits. For this reason, they argue that it is desirable to make a risk management statement (VOR) mandatory. This requires companies to identify risks and take measures to manage them.
No new rules, but strict supervision
The quartermasters do not argue for more rules, but for more and better supervision. They therefore welcome the proposed institution obligation for supervisory boards. The call for intervention in the structure of the sector is obvious, but from the studies commissioned by the quartermasters (into joint audit, intermediate and structural split) it appears that this is not desirable at the moment. The introduction of quality indicators (Audit Quality Indicators), on the other hand, the quartermasters see it as a logical next step to previous advice. These indicators should have been there a long time ago.
Redesign (practical) education
Education is a fundamental part of the necessary changes. The training of the young professional ultimately forms the basis for quality improvement. The quartermasters therefore emphatically ask the sector to speed up the revision of the professional profile and the redesign of education. This also includes the system of permanent education.
Speed up the legislative process
According to the quartermasters, the desired speed also relates to the legislative process. The anchoring of the measures in the Future of Accountancy Act is an important step in the implementation of the announced measures. The quartermasters therefore call on politicians to speed up the adoption of the future accountancy bill as much as possible and to keep pressure on the sector. In the meantime, constant vigilance is required to ensure that the quality of the statutory audit is not damaged.
Quartermaster assignment
On April 24, 2020, the quartermasters received the assignment from then Minister of Finance Wopke Hoekstra to further investigate the recommendations of the Commission for the future of the accountancy sector (Confidence on audit, Cta 2020). Roughly speaking, the assignment was twofold: ensuring tangible results and, on the other hand, driving and encouraging improvements. The first applies to the Audit Quality Indicators (AQIs) and the various reports on structural interventions: audit only with follow-up research, joint audit, the experiment and the case study about the intermediary model and research into the partner model.
In addition, the quartermasters, on their own initiative, instructed the Education expert group together with the Royal Dutch Professional Organization of Accountants (NBA) to come up with a plan for the professional profile and the (permanent) training.
For three and a half years, the quartermasters spoke with a large number of stakeholders. They also sought connections with commissioners, scientists, audited organizations and practical trainers and took note of relevant reports from, among others, the Netherlands Authority for the Financial Markets (AFM), the Royal Dutch Professional Organization of Accountants (NBA) and the Collaborating Registered Accountants and Accountants-Administration Consultants (SRA). ).
From the start of the assignment, interim reports have been submitted every six months to the Minister of Finance, who then forwarded the documents to Parliament. The progress reports were both procedural in nature and reflective of current developments. The quartermasters functioned independently of the sector, but also towards public administration, politics, the Netherlands Authority for the Financial Markets (AFM) and other stakeholders.