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Final report MCA:
Impactful interventions required in the Dutch accountancy sector

Monitoring Commissie Accountancy

1/14/2020

The Dutch Accountancy Monitoring Committee (MCA) reports that after five years of measures, the quality awareness within the sector has been strengthened, cultural change is being worked on and various hopeful initiatives have been set in motion. However, the performance gap has not been closed. Audit firms insufficiently comply with the quality level laid down in laws and regulations and tested by supervisors. The operation and effects of the measures taken cannot be sufficiently demonstrated and are not permanently secured.

In the opinion of the MCA there is therefore a structural problem. This emerges from the final report of the MCA published today. It concludes that many problems are not new at all and are recurring. That is why the MCA comes up with a package of 30 recommendations. External pressure and impactful interventions are necessary for a successful transformation of the sector.

There is a clear performance gap: audit firms do not sufficiently meet the quality level laid down in laws and regulations and tested by regulators. In the opinion of the MCA, this is a structural problem. The number of failures in quality inspections is unacceptably high, considering the public interest. Also the role of the accountant in fraud and discontinuity, which is important in the light of public trust, has not been sufficiently fulfilled by the sector.

High-profile incidents are tangible evidence to the outside world of quality deficiencies. These can have significant financial consequences for those who have suffered damage, but also for audit firms themselves. Accountancy firms are socially indispensable and must guarantee a reliable, solid and robust financial infrastructure. This applies to a greater extent to the largest accountancy organisations (Big4). This not only justifies imposing high quality requirements on them, but also requires a solid financial resilience. The MCA sees the need to promote market forces in the accountancy sector and therefore supports the execution of experiments and pilots in the area of structural models investigated by the AFM. Read further www.monitoringaccountancy.nl.

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