About our supervision of audit firms
Society needs to be able to rely on the opinions expressed by auditors and audit firms in the auditor’s reports on financial statements. Investors, analysts and other users of the financial statements base key economic and other decisions on this opinion. The AFM is committed to promoting high-quality statutory audits by means of our supervision.
Basic principles for proper statutory audits
Statutory auditors should be independent and adhere to fundamental principles with regard to ethics and conduct. They should not let themselves be influenced by commercial or personal interests. A high-quality statutory audit ensures that the information in the financial statements gives a true and fair view of the actual situation and that this information has been compiled in a proper and sound manner.
Compliance with statutory requirements and standards
The AFM supervises audit firms that perform statutory audits. An audit firm must have a license to be allowed to perform statutory audits. Additional, stricter requirements apply for the performance of statutory audits at public interest entities (PIEs). We monitor whether audit firms comply with the applicable statutory requirements and standards.
Quality control
Our supervisory activities include examining the system of quality control and the quality-oriented culture within audit firms, as well as the quality of statutory audits. We focus on promoting controlled and ethical business operations. Therefore, the control of fraud risks is a permanent item on our supervisory agenda. We also examine the conduct and culture within audit firms and the quality of statutory audits. In addition to our regular screening, we also frequently conduct investigations into incidents and thematic reviews.
Identifying trends, developments and risks
Our supervision focuses on the key risks. Accordingly, we identify trends and developments and possible associated risks at both sector level and audit firm level. To this end, we request data from audit firms.
Fees
The fees for our supervision are based on the regulations drawn up by the Ministry of Finance. These fees will rise over the coming years, but we cannot yet determine to what extent. We determine the amounts of the levies for each audit firm on an annual basis.
Legislation and regulations
The quality requirements for audit firms and the AFM’s supervision of audit firms are based on the Dutch Audit Firms Supervision Act (Wta), along with the detailed provisions laid down in the Dutch Audit Firms Supervision Decree (Bta) as well as Regulation (EU) No 537/2014.
Questions?
If you have any questions about our supervision of audit firms, please send an email to wta@afm.nl.