Supervision of financial reporting requirements
The financial reporting of listed companies of which the Netherlands is the home Member State must comply with a number of national legal requirements, international reporting standards, and other regulations. In accordance with the Financial Reporting Supervision Act (Wet toezicht financiële verslaggeving, or Wtfv), the AFM supervises compliance thereof.
Request for further information
The AFM may ask questions to listed companies about the application of financial reporting requirements. These questions are to be considered as a request for further information. Companies are required by law to respond to this request by providing further information, orally or in writing.
Request for further information
Further steps
Once the further information has been received, the AFM will determine what further steps are necessary. The AFM may decide to make informal arrangements with a company which must be observed when preparing its future financial reports.
Notification
The AFM may also issue a notification in which it informs a company that the financial reporting does not comply with the financial reporting requirements, and that in future the company should draw up its financial reports in accordance with these reporting requirements.
Notification letters financial reporting
Recommendation
The AFM may also decide to have the notification accompanied by a recommendation. In that case, the company must publish a press release in which it explains how the reporting requirements will be applied in future and the consequences thereof for its financial reporting.
Notification letters financial reporting
Enterprise chamber
The Financial Reporting Supervision Act (Wet toezicht financiële verslaggeving, or Wtfv) does not grant the AFM the authority to impose an instruction, an order for incremental penalty payments or an administrative fine, but if necessary the AFM can go to court. Following the issuance of a recommendation or if the AFM is of the opinion that a company has not adequately responded to a recommendation, the AFM may start procedures at the Enterprise Chamber. The court may order the company to draw up its financial statements in accordance with the financial reporting requirements.
Thematic reviews
By carrying out and publishing thematic reviews the AFM draws attention to the application of specific reporting requirements in a particular area of business. In doing so, the AFM wants to stimulate companies to improve the quality of their financial reporting.
IASB