Netherlands Association of Registered Controllers

The Audit Firms Supervision Act of 2006 (as amended) stipulates that a quality assurance (QA) review system for all audits be established and overseen by the Authority for the Financial Markets (AFM). AFM performs inspections of audit firms that conduct statutory audits of public interest entities (PIEs) and delegated responsibility for inspections of audit firms that audit non-PIEs to the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands).

VRC members are not auditors. They offer services in management accounting, financial accounting, integrated reporting, strategic control and risk management, and corporate governance. The VRC has no responsibility for adoption and implementation of the QA system for audits in the Netherlands.

It has several committees, including a Quality Assurance Committee, that focus on the quality of education and training for members around relevant standards. The VRC is supporting its members who may be impacted by the adoption of quality management standards and training its members more on risk management.

Current Status: Sustain

The initial professional and continuing professional development requirements are established for auditors in the Accountancy Profession Act of 2014 (as amended). Accountants may voluntarily join Vereniging van Registercontrollers (the Netherlands Association of Registered Controllers, VRC) and be subject to its regulations. The VRC offers a designation of Registered Controller to individuals who successfully complete the Executive Master of Finance and Control (EMFC) program, covering 1,680+ study hours across courses in leadership, data, business improvement, compliance, business models, etc. EMFC entry requirements are a MSc in Accounting and Control plus 2 years of experience. Universities conduct exams and assess competencies as part of the program.

The VRC engages in policy dialogues with accredited education providers and conducts reviews of existing programs through its Quality Assurance Committee to ensure continued alignment with the standards and the professional development and competence of future Registered Controllers. It continuously monitors changes to the IES so that the association’s standards are compliant and kept up to date. The VRC also requires continuing professional development for its members – 120 hours over 3 years. VRC reports that professional education requirements for the designation of Registered Controller address all the relevant requirements of the latest IES.

The VRC also complies with SMO 2 by providing a range of educational material and learning opportunities for members via its Finance Academy to fulfill the mandatory CPD requirements, and monitors and enforces compliance.

Current Status: Sustain

The Accountancy Profession Act of 2014 (as amended) specifies that the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands) is responsible for setting auditing standards in the Netherlands with oversight from the Netherlands Authority for the Financial Markets (AFM). NBA Netherlands adopted ISA as issued by the IAASB without modifications, including the effective dates, for the conduct of all financial statement audits.

VRC members are not auditors. They offer services in management accounting, financial accounting, integrated reporting, strategic control and risk management, and corporate governance. Nonetheless, the VRC promotes the implementation of the standards that have been adopted by offering courses in its continuing professional development program that include standard-related topics and the EMFC program (IPD) addresses management accounting and auditing aspects.

The association also assists members with keeping up to date on IAASB standards and pronouncements by providing access to IAASB and IFAC resources.

Current Status: Sustain

Professional accountants other than auditors may be regulated through their voluntary membership in the Netherlands Association of Registered Controllers (VRC). The VRC Code of Ethics/Conduct (the Code) complies with the relevant IESBA criteria for Registered Controllers – i.e., the VRC Code is based on part 1 – complying with the Code, Fundamental Principles and Conceptual Framework, part 2 – Professional Accountants in Business, Part 4B – Independence for Assurance Engagements Other than Audit and Review Engagements. The VRC states that its Enforcement & Ethics Committee monitors, analyses, notes, and comments the revisions of the IESBA Code of Ethics/Conduct on a continuous basis. Furthermore, the VRC adopts and implements these revisions every five years by reviewing and updating the VRC Code. The VRC Code has been updated in May 2023 and will apply to all members from 1 January 2024.

The association supports members’ compliance with the Code of Ethics through the publication of updates and changes in the Code of Ethics on the VRC’s website and in its Management Control and Accounting Journal as well as providing Dutch and English versions in each member’s online portal. It has instituted mandatory ethics training based on the fundamental principles of the Code of Ethics and incorporates material on ethical requirements into EMFC’s initial professional development and VRC’s continuing professional development curricula. The VRC also provides“credit cards” setting out the five basic principles of the Code in Dutch and English in a format small enough to fit in a wallet and organizes events, such as Code Challenge Meetings, that allow members to discuss case studies that portray ethical dilemmas with a confidential counselor to assist members in resolving significant ethical situations.

The VRC also participates in the international standard-setting process by providing comments on Exposure Drafts and other IESBA pronouncements.

Current Status: Sustain

In the Netherlands, public sector accounting standards are established by the Dutch Accounting Standards Board (DASB) and the Governmental Accounting Standards Board (GASB). These standards are based on the European Public Sector Accounting Standards (EPSAS) and require public sector entities to follow accrual-based accounting principles. Most public sector departments use accrual accounting apart from government ministries. The central government is using a cash and commitments bookkeeping system. There is no plan to introduce accrual based IPSAS for public sector standards in the Netherlands.

As part of its best endeavors, the VRC promotes generally accepted accounting techniques into the profit sector, such as performance management and finance professionalism as best practice, and IPSAS ideas into the not-for profit sector. The VRC provides continuing education for its members that work in the public sector; provides access to IPSASB and IFAC resources related to the standards; publishes special articles on the theme of public sector accounting in the Management Control and Accounting Journal; and publishes interviews with public sector accountants.

The institute also has a Public Sector Working Group comprising key stakeholders that encourage adoption of/convergence with IPSAS, and it initiates and participates in various international forums and conferences.

The VRC also participates in the international standard-setting process by providing comments on Exposure Drafts issued by the IPSASB.

Current Status: Sustain

Professional accountants other than auditors may be regulated through their voluntary membership in the VRC. In accordance with its constitution, VRC established an I&D system, comprised of an Execute Board, Disciplinary Board, Appeals Board, and an Enforcement & Ethics Committee, to monitor and enforce compliance with professional standards, the Code of Ethics, and disciplinary regulations by its members who are management and financial accountants. The VRC confirms that its I&D procedures align with the SMO 6 benchmark.

VRC’s Disciplinary Board receives, assesses, and rules on complaints against members while the Appeals Board receives, assesses, and rules on appeals against the rulings of the Disciplinary Board. The Disciplinary and Appeals Boards comprise a: chairperson, VRC member (management accountant), and non-VRC member (a university professor, accountant, attorney or ethical professional).

VRC ensures that all members have access to adequate continuing professional development courses on current regulations and the I&D systems and processes.

VRC annually reviews the performance of the I&D system, including the independence of the members of the Disciplinary Board, to ensure continued compliance with SMO 6.

Current Status: Sustain

In accordance with the Annual Accounts Title 9 of the Netherlands Civil Code (NCC) of 2016 (as amended), the Dutch Accounting Standards Board is responsible for setting applicable private sector accounting standards in the Netherlands. Per the IFRS Foundation, EU-endorsed IFRS are required for the preparation of separate and consolidated financial statements of listed companies and as well as large private limited companies that are deemed to have public accountability.

The VRC focuses on supporting implementation given that financial reporting represents a significant part of its members’ work. The IFRS are included in the EMFC (IPD) program and in the VRC’s continuing professional development courses offered by its Finance Academy. The VRC also provides updated information on IFRS through its website and magazine.

The VRC participates in the standard-setting process by raising awareness of the potential impact of IASB Exposure Drafts (EDs) and Interpretations. Additionally, the VRC supports exemptions for SMEs and allows micro-enterprises to choose Dutch tax standards when appropriate. These efforts aim to enhance accounting and financial reporting standards.

Current Status: Sustain