Articles

Reform of the audit market

Reform of the audit market

Reform of the audit market

08.07.2014 NL law

On 16 June 2014, a European regulation and a European directive regarding the reform of the audit market came into force (OJ L 158). These new European regulations are intended to further define the role of statutory auditors, strengthen independence and reinforce professional critical assessment.

On 16 June 2014, a European regulation and a European directive regarding the reform of the audit market came into force (OJ L 158). These new European regulations are intended to further define the role of statutory auditors, strengthen independence and reinforce professional critical assessment. The regulation covers statutory audits of public-interest entities (‘PIOs’) and amends the current directive regarding statutory audits of annual accounts. The regulation has direct effect from 17 June 2016. By this date, the regulation must be implemented in Dutch legislation. This has a number of consequences, such as a compulsory rotation of accountancy firm.

Part of the new European regulations concern the obligation of PIOs (currently this only includes listed companies, non-listed banks and insurers) to change their accountancy firm every ten years. In the Dutch Accountancy Profession Act (Wet op het Accountantsberoep) the rotation period is eight years. This obligation comes into force in the Netherlands on 1 January 2016 for the financial years starting on or after such date. However, in practice, changes are already taking place. The Dutch Minister of Finance confirmed that the Dutch regulations will be aligned with the rotation period of ten years in the European directive. It is unclear when this will be done and what the implications will be for those PIOs that have been using the same accountancy firm for more than eight years, but less than ten years, on 1 January 2016. In addition, the partner that signs the auditor’s statement on behalf of the audit firm must be changed every five years. In the Netherlands, the maximum period after which the partner signing the auditor’s statement must be changed is seven years. Furthermore, the cooling-off period, after an accountancy firm has been engaged by a PIO as a controlling auditor, will be extended from two to four years.

Another aspect of the new European regulation is the separation of audit services and advisory services. Dutch regulation in this respect exists already, but the methodology for the separation of audit services and advisory services in the Netherlands is different from the methodology used in the European regulation. European regulation works with a list of activities that are prohibited, while the Dutch regulation works with a list of activities that are allowed. Dutch law will not be changed in this respect.

For more information regarding the Dutch legislation and regulations we refer to our Corporate Alert of 11 December 2012 and our Corporate Update of 11 July 2013.

Team

Related news

08.08.2019 BE law
Regulating online platforms: piece of the puzzle

Articles - The new Regulation no. 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services, applicable as of 12 July 2020, is another piece of the puzzle regulating online platforms, this time focussing on the supply side of the platforms.

Read more

01.08.2019 NL law
General court dismisses all five appeals in the optical disk drives cartel

Short Reads - The General Court recently upheld a Commission decision finding that suppliers of optical disk drives colluded in bids for sales to Dell and HP by engaging in a network of parallel bilateral contacts over a multi-year period. The General Court rejected applicants' arguments regarding the Commission's fining methodology, including that the Commission ought to have provided reasons for not departing from the general methodology set out in its 2006 Guidelines.

Read more

02.08.2019 NL law
De insidermelding onder de Verordening Marktmisbruik met betrekking tot afgeleide en verbonden financiële instrumenten

Articles - Soeradj Ramsanjhal schreef samen Jeevan Sathie een artikel over de insidermelding bij beursvennootschappen. Deze meldplicht is niet altijd snel te doorgronden, met name als transacties betrekking hebben op afgeleide of verbonden financiële instrumenten. Ten aanzien hiervan is een 20%-drempel opgenomen en een uitzondering van de meldplicht met betrekking tot deelnemingsrechten in discretionair beheerde beleggingsinstellingen.

Read more

01.08.2019 NL law
Brand owners beware: Commission tough on cross-border sales restrictions

Short Reads - The European Commission recently imposed a EUR 6.2 million fine on Hello Kitty owner Sanrio for preventing its licensees from selling licensed merchandising products across the entire EEA. Sanrio is the second licensor (after Nike) to be fined for imposing territorial sales restrictions on its non-exclusive licensees for licensed merchandise. A third investigation into allegedly similar practices by Universal Studios is ongoing. The case confirms the Commission's determination to tackle these practices, regardless of type or form.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring