Audit committees

Audit committees are a key link in the chain of parties that ensure proper reporting by Dutch public interest entities (PIEs) and the related assurance provided by the statutory auditor.

Audit firm selection

The audit committee is responsible for the procedure for the selection of the audit firm and advises the Supervisory Board on which audit firm it should nominate.

Overview of PIE audit firms

Pursuant to the applicable European regulations, the Dutch Authority for the Financial Markets (AFM) annually publishes an overview of the audit firms licensed to perform statutory audits at PIEs, which are the following:

BDO Audit & Assurance B.V.;
Deloitte Accountants B.V.;
Ernst & Young Accountants LLP;*
KPMG Accountants N.V.;*
Mazars Accountants N.V.;
PricewaterhouseCoopers Accountants N.V.*

*Each of these audit firms received more than 15% of the total amount in fees billed annually to PIE audit clients in the Netherlands for statutory audits. The criteria applied by a PIE for the selection of a new audit firm may not preclude the participation of audit firms that received less than 15% of the total amount in audit fees billed to PIEs in the previous year.

Supervision of the reporting process

The audit committee monitors (the integrity of) the reporting process and the quality of the statutory audit performed by the statutory auditor. As part of this, the audit committee monitors the effectiveness of the internal risk management and internal control systems, the internal audit system (where in place) and the risk management system within the reporting process. The audit committee confers with the auditor whenever necessary. When the auditor makes recommendations, the audit committee sees to it that these are followed up by the entity’s management.

Furthermore, if the AFM publishes supervisory findings and conclusions that are based on statutory audits reviewed by the AFM, PIE audit firms are obliged to share such findings and conclusions with the audit committees of the PIEs concerned within 10 working days of their publication. The purpose of this is to ensure transparency about the quality of statutory audits and to enable audit committees to better perform their duties.

Strengthening the role of audit committees

The AFM is committed to reinforcing the role of audit committees in relation to the quality of reporting and the quality of statutory audits. We do this mainly by initiating a dialogue on this, including by organising seminars and round-table discussions. In addition, we monitor the performance of audit committees, which we publicly report on to the European Commission at least once every three years.

Legislation and regulations

These and other responsibilities are based on the following legislation and regulations:
  • Book 2 of the Dutch Civil Code (Burgerlijk Wetboek, BW);
  • the Dutch Corporate Governance Code;
  • Regulation (EU) No 537/2014 (specifically Articles 5(4) and 16);
  • Sections 21a and 48a(7) and (8) of the Audit Firms (Supervision) Act (Wet toezicht accountantsorganisaties, Wta);
  • the Decree on the Establishment of Audit Committees (Besluit instelling auditcommissie, BIAC).
Click here for an overview (in Dutch) of the relevant legislation and regulations (PDF, 447 kb)

 

Role of the AFM in relation to audit committees

Pursuant to its formal supervisory duties, the AFM is authorised to monitor matters such as the role of audit committees in audit firm selection and how they assess the independence of the statutory auditor employed at the PIE by the audit firm.

News and publications

Supervisory Boards have impact, but there are differences between audit firms (PDF, 466 kb) (download)
Guidelines on appointment of statutory auditors by public interest entities (opens in a new window)
Recommendations to strengthen audit committees in their role in the audit of financial statements (opens in a new window)

Information for audit firms

Auditors and audit firms performing statutory audits are required to meet quality criteria.

Information for companies issuing securities

Statutory requirements apply to the financial reporting of listed companies.