Finance minister Jeroen Dijsselbloem has pledged to get tough on the big four accountancy firms after a damning report from the financial services regulator.

The AFM said on Thursday that all four firms – KPMG, Deloitte, PwC and EY – have done little to improve the quality of their annual report audits since the last inspection in 2010.

The problems are structural and require ‘fundamental reforms and a cultural shift,’ the AFM said.

In a reaction, Dijsselbloem said ‘the checks which accountants are required to carry out by law should be above reproach… It is unacceptable that the quality is not up to standard.’

Measures

In an effort to force the firms to improve, the AFM is planning a series of reforms. Accountancy groups will be required by law to have a supervisory board. Senior officials will have to be vetted by the AFM and the supervision of semi-public bodies such as hospitals and housing corporations will be stepped up.

According to the NRC, KPMG is the worst performer of the big four in the Netherlands. Of the 10 audits which the AFM looked at, seven were branded ‘insufficient’ – which means the books were signed off without the accountant being certain they were accurate.

Four out of 10 PwC and Deloitte audits failed to make the grade as did three carried out by EY.