Confidence in the accountant and the accountancy organization is under pressure, among other things, due to accounting scandals, information from supervisors and reports about the accountancy sector.

The Committee on the Future of the Accountancy Sector (hereinafter: Cta) has indicated in its research that quality improvement is necessary. The Cta has recommended a package of measures to improve the quality of statutory audits by accountants.

On December 14, 2023, the bill to amend the Accountancy Sector Act (see parliamentary documents in the House of Representatives, session year 2023-2024, number 36 484) was submitted to the House of Representatives. This bill aims to sustainably improve the quality of statutory audits by accountants as advised by Cta.

The following measures are proposed in this bill:

  • Establishing an internal supervisory body at the largest accounting firms. First of all, it is proposed to include an obligation to the effect that a profit distribution proposal must have the prior approval of the internal supervisory body. Secondly, the internal supervisory body will have a right of approval with regard to decisions on a number of other subjects that are part of the aforementioned two-tier regime.
  • Simplifying and strengthening supervision by the Netherlands Authority for the Financial Markets (AFM). The supervision of non-PIE audit firms will be transferred to the AFM.
  • Deficiencies in a statutory audit must be submitted to the AFM. Defects can be reported in writing, by email or by telephone. The bill aims to lower the threshold for audit firms to report defects found in a statutory audit to the AFM.
  • Determination, reporting and publication obligation based on quality indicators.
  • Appointment authority for the public law professional organization for accountants if an audit client finds an accounting firm unwilling to conduct the statutory audit.
  • The purpose of the bill is to improve the quality control system by clarifying the co-responsibility of the audit firm. This must ensure the quality of the statutory audits.
  • The bill also contains a proposal regarding the professional competence of foreign accountants (not from the European Economic Area). It is proposed to expand the opportunities for accountants from third countries to achieve the same level of professional competence as applies in the Netherlands.
  • Achieving the modernization of the internal governance of the Royal Dutch Professional Organization of Accountants (hereinafter: NBA) by withdrawing the regulation regarding the member groups in the Accounting Profession Act (hereinafter: Wab) and replacing it with a regulation that enables the professional organization to establish a new organizational structure by regulation.
  • Finally, the bill contains the streamlining of accounting disciplinary law. This means that the disciplinary measures against accountants will be expanded. In addition, the accounting chamber has the option to decide that, despite a complaint being declared well-founded, no measure will be imposed. Lastly, it is proposed to streamline the disciplinary process in a small part and bring it into line with other forms of disciplinary law.

The House of Representatives still needs to approve this proposal.





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