Together for a sharper focus on cash flow statements

Research among listed companies and audit firms

We reviewed the quality of the cash flow statement in the 2024 financial statements of thirty listed companies as part of our financial reporting supervision. In addition, we examined how the six audit firms with a PIE-license have designed and performed audits of cash flow statements. The review was carried out from both the perspective of financial reporting supervision and the supervision of audit firms, covering the entire chain from preparation through to audit. The review builds on recurring findings on cash flow statements in our financial reporting supervision and provides insight into the quality of the cash flow statement and its audit. It highlights where errors arise, to what extent they are identified and corrected, and which patterns can be observed.

Quality of cash flow statements generally sufficient, but with clear points of attention

The review shows that most cash flow statements and the related disclosures comply with IAS 7 (Statement of Cash Flows). At the same time, misstatements were identified that were not always detected or appropriately addressed in the audit, making further improvements necessary. We identified five points of attention for companies to improve the application of IAS 7 (Appendix A). The accompanying self‑assessment (Appendix B) directly builds on these points and is intended to enable a structured assessment of how the cash flow statement is prepared and to what extent its quality is safeguarded. For audit firms, we formulated ten points of attention relating to the system of quality management and audit procedures with respect to the cash flow statement (Appendix C).

The AFM expects reflection and concrete follow-up actions

Listed companies under our financial reporting supervision will receive a letter setting out the five points of attention and the self‑assessment. We expect companies to actively use the self‑assessment and translate its outcomes into concrete improvement measures. In addition, the AFM expects audit firms to explicitly reflect on the findings of the review and to translate the points of attention into their system of quality management and audit approach. We also expect them to demonstrate which measures have already been taken and which additional measures are required to address these points of attention adequately and in a timely manner. We will follow up on this in an appropriate manner.

Scope and follow-up in supervision

The AFM calls on a broader group of stakeholders to take note of this review, reflect on the points of attention and use the self‑assessment. This includes, among others, IFRS‑reporting companies, members of management boards and audit committees, as well as individual auditors and audit firms holding a license for statutory audits. We will continue to closely monitor, as part of our supervision, how companies and audit firms address the points of attention and translate them into their practices. Based on this, we will assess whether additional supervisory measures are necessary.

More information

Bijlage A - Aandachtspunten uit het verkennend onderzoek naar kasstroomoverzichten in de jaarrekeningen (pdf, 131 kB)
Appendix B - Self-assessment cash flow statements (pdf, 198 kB)
Bijlage C - Aandachtspunten uit het verkennend onderzoek kasstroomoverzichten bij accountantsorganisaties (pdf, 132 kB)