Accountants are not assessing each other's work well enough, regulator says

The Dutch Authority for the Financial Markets (AFM) said on Friday that accountants in the Netherlands do not review each other's work well enough. AFM investigated 21 accountantcy offices and found that the quality of controls is lacking when an independent accountant reviews the work of an external accountant.

The quality control reviews and assessments are an essential way of guaranteeing the quality of legal controls, the AFM emphasized. This is of great importance for investors, analysts, and other users of annual accounts who need to be able to trust that the information in the annual accounts "gives a fair view of the reality."

The accountant's offices with a regular permit were most likely to have poor review policies, although nearly all of those investigated needed more depth, according to the AFM. Around nine of the 22 accountants' offices with permits for controls of banks, insurers, and listed companies had insufficient depth in their assessments.

These assessments, opdrachtgerichte kwaliteitsbeoordeling, are mandatory for accountants who check banks, insurers, and listed companies. These are used to determine that the external auditor reached their verdict "reasonably," according to the supervisor.

The AFM expects the parties to work on improving their assessments, and will continue actively following the quality improvements. The supervisor will also "tailor its supervisory activities accordingly" if necessary.