The quality of external audits by the big four accountants offices in the Netherlands must be fundamentally improved, according to the financial services sector watchdog AFM.

In the report into the performance of Deloitte, Ernst&Young, KPMG and PricewaterhouseCoopers, the AFM says some audits are falling short of the necessary standard and accountants are not critical enough of the information they have been given by clients.
The AFM looked at 46 financial reports relating to the construction, property, automotive and public sectors.

Investors
External audits are key in maintaining investor confidence and there are ‘risks’ in the way they are being carried out, the AFM’s Steven Maijoor told the Financieele Dagblad. The AFM found problems in 29 out of the 46 reports analysed and plans to make some complaints to the sector’s disciplinary body, the paper says.
The AFM drew similar conclusions after looking at the quality of accountancy controls in the financial services sector last year.
The big four carry out some 80% of the corporate audits required by law in the Netherlands, the AFM said.