Netherlands

As a member of the European Union (EU), the Netherlands is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations. The Netherlands has fully aligned its legal framework with the EU acquis communitaire as it relates to accounting and auditing.

Accounting Framework

Annual Accounts Title 9 of the Netherlands Civil Code (NCC) of 2016 (as amended) stipulates the requirements for preparation of financial statements, including applicable accounting standards and financial reporting thresholds. In accordance with the law, the Dutch Accounting Standards Board (DASB) is responsible for enacting financial reporting 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 – this includes banks, central credit institutions, insurers, and any enterprise, institution or public body forming part of one of the categories designated pursuant to Section 2 of the Audit Firms Supervision Act that makes it possible for the legislator to expand the class of PIEs. In addition, all companies in the Netherlands that use EU-endorsed IFRS Standards are also required to follow a part of the Dutch Accounting Standards (DAS) for Medium-sized and Large Entities, developed by the DASB. Banks, financial institutions, and credit institutions are subject to additional reporting requirements by the Dutch Central Bank while insurance companies also follow regulations outlined by the Dutch Authority for the Financial Markets.

For companies whose securities are not publicly traded, the DASB has outlined different frameworks based on size. Medium and large-sized companies can choose between the Dutch Accounting Standards for Medium-sized and Large Entities or use EU-endorsed IFRS combined with parts of the DAS for Medium-sized and Large Entities.

Small entities may choose one of four options/standards to prepare their financial statements: Book 2 of the Dutch Civil Code combined with fiscal valuations; Dutch Accounting Standards for small entities; Dutch Accounting Standards for medium sized and large entities; or IFRS Standards as adopted by the EU combined with a part of the Dutch Accounting Standards for medium-sized and large entities. Small entities are defined as those that meet two of the following three criteria: (i) revenue below €8.8 million; (ii) assets below €4.4 million; and (iii) number of employees below 50.

Auditing Framework

The auditing requirements in the Netherlands transpose the Audit Directive and Regulation (EU) No 537/2014. Under the Accountancy Profession Act of 2014 (as amended), all entities except micro and small-sized entities are subject to mandatory, annual audit requirements.

The Act specifies that the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands) is responsible for setting auditing standards in the Netherlands. NBA Netherlands adopted ISA as issued by the IAASB without modifications, including the effective dates, for the conduct of all financial statement audits.

In the Netherlands, only auditors are regulated at the state level under the Audit Firms Supervision Act of 2006 (as amended), the Accountancy Profession Act of 2014 (as amended), and the Act on Disciplinary Jurisprudence of Accountants of 2008 (as amended).

The initial professional and continuing professional development (IPD and CPD respectively) requirements are established for auditors in the Accountancy Profession Act of 2014 (as amended). Responsibility for implementation is shared by the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands), the Commissie Eindtermen Accountantsopleiding (CEA), the Dutch Flemish Accreditation Organization (NVAO), and universities (academic and professional).

NBA Netherlands confers the designations of Chartered Accountants (CAs) or Accounting Consultants (AAs), depending on the course of study at the university (or post university) level. Both designations are protected and are given practice rights for audit and assurance in the jurisdiction. To pursue the RA designations, individuals must hold a master’s degree from a recognized university, complete a 1- or 2-year(s) part-time professional post-master program, complete three (3) years’ practical experience, and pass NBA Netherland’s examinations. The requirements for AAs are similar, except that AAs can hold a bachelor’s degree and complete a 1.5 year part-time professional post-bachelor program.

According to the above-mentioned acts, only auditors registered with the Royal NBA, that are also registered on the list of audit firms with a license from the Netherlands Authority for the Financial Markets (AFM), can perform statutory audits in the Netherlands. NBA Netherlands reports that statutory audits are mostly performed by RAs, while AAs tend to focus on small and medium-sized enterprises. As of 2018, audits of public interest entities (PIEs) are restricted to RAs. The law also provides for the acknowledgement of foreign qualifications and authorizes the AFM to recognize professional qualifications that were obtained abroad for individuals who wish to practice in the Netherlands.

The Commissie Eindtermen Accountantsopleiding (CEA), which is an independent body appointed by the Ministry of Finance, is responsible for overseeing university education of RAs and AAs, the accreditation and oversight of education providers, and establishment of work experience competencies for the profession. In line with the Act on Disciplinary Jurisprudence of Accountants of 2008 (as amended), RAs and AAs that are in violation of any rules or regulations are subject to the Ministry of Justice’s investigations & disciplinary (I&D) system. As for audit firms, the Audit Firms Supervision Act of 2006 (as amended) stipulates that they are subject to the Authority for the Financial Market’s (AFM) I&D system. Both the AFM and NBA Netherlands are required under the Audit Firms Supervision Act of 2006 (as amended) to file and forward cases against individual auditors to the Ministry of Justice’s Disciplinary Court.

In addition to the above, AFM (i) oversees the operations of NBA Netherlands; (ii) monitors the profession’s performance through its quality assurance review system for public interest entities; and (iii) maintains the audit license registry.

A summary of NBA Netherland’s responsibilities includes the following: (i) setting auditing and ethical standards for auditors; (ii) conducting quality assurance reviews of non-PIEs (delegated by the AFM); (iii) conducting continuing professional development; (iv) conducting audit licensing exams and issuing certificates; (v) undertaking any other activities that promote high professional standards and improve the quality of auditing services; and (vi) collecting and forwarding complaints to the Disciplinary Court.

Accountants are not regulated at the state level, but they may voluntarily join Vereniging van Registercontrollers (the Netherlands Association of Registered Controllers, VRC) and be subject to its regulations and guidelines. VRC members offer services in management accounting, financial accounting, integrated reporting, strategic control and risk management, and corporate governance. 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 also requires continuing professional development for its members, adherence to a Code of Ethics, and maintains an I&D system to regulate its members.

The Audit Firms Supervision Act of 2006 (as amended) established the Netherlands Authority for the Financial Markets (AFM) as the independent public audit oversight authority. Its role and responsibilities are outlined in the Regulation section. The AFM is a member of the International Forum of Independent Audit Regulators.

Netherlands Association of Registered Controllers (VRC)

VRC was established in 1988 as a voluntary membership organization for those who offer services in management accounting, financial accounting, integrated reporting, strategic control and risk management, and corporate governance. The VRC offers a designation of Registered Controller to members who successfully complete the Executive Master of Finance and Control program. It also requires continuing professional development for its members, adherence to a Code of Ethics, and maintains an I&D system to regulate its members.

VRC’s members who are also members of the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands) may perform audits and are subject to the regulations of the NBA Netherlands.

VRC is a member of IFAC and Accountancy Europe.

Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands)

NBA Netherlands was formed from the merger of two Dutch professional accountancy organizations—the Royal Dutch Institute of Chartered Accountants (Royal NIVRA) and the Dutch Association of Accountants (NOvAA)—in January 2013. The Royal NIRVA, which was established in 1895, comprised accountants and auditors in public practice, the business sector, and government. Members of the NOvAA, which was founded in 1948, were mainly accountants. In December 2012, the Accountancy Profession Act established the legal status of the NBA Netherlands as a mandatory membership organization for auditors.

The institute’s mandate includes: (i) setting auditing and ethical standards for auditors; (ii) conducting quality assurance reviews of non-PIEs (delegated by the AFM); (iii) conducting continuing professional development; (iv) conducting audit licensing exams and issuing certificates; (v) undertaking any other activities that promote high professional standards and improve the quality of auditing services; and (vi) collecting and forwarding complaints to the Disciplinary Court.

NBA Netherlands is a member of IFAC, Accountancy Europe, and the European Federation of Accountants and Auditors for small- and medium-sized entities.

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) at least once every three years. It delegated responsibility for inspections of audit firms that audit non-PIEs to the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands) which conducts inspections once every six years.

NBA Netherlands accredits specific bodies to conduct QA reviews for members who provide services to the public sector, are internal auditors, or operate small- and medium-sized practices.

NBA Netherlands reports that the QA review systems operating in the jurisdiction are in line with the requirements of SMO 1.

Current Status: Adopted

The initial professional and continuing professional development (IPD and CPD respectively) requirements are established for auditors in the Accountancy Profession Act of 2014 (as amended). Responsibility for implementation is shared by the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands), the Commissie Eindtermen Accountantsopleiding (CEA), the Dutch Flemish Accreditation Organization (NVAO), and universities (academic and professional).

The CEA is an independent body appointed by the Ministry of Finance and is responsible for overseeing university education of Registered Accountants (RAs) and Accounting Consultants (AAs), the accreditation and oversight of education providers, and establishment of work experience competencies for the profession.

NBA Netherlands confers the designations of RAs or AAs, depending on the course of study at the university (or post university) level. Both designations are protected and are given practice rights for audit and assurance in the jurisdiction. All members are required to complete a minimum of 80 hours of CPD every two (2) years. To pursue the RA or AA designations, individuals must hold a university degree from a recognized university, complete three (3) years’ practical experience and pass NBA Netherland’s examinations. The requirements for both designations are similar, except that RAs must have master’s degrees and are further specialized in financial auditing and external reporting.

NBA Netherlands indicates that the professional education requirements for RAs and AAs are completely aligned with the 2015 revised IES.

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 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.

Current Status: Adopted

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. NBA Netherlands adopted ISA as issued by the IAASB without modifications, including the effective dates, for the conduct of all financial statement audits. The 2018 Handbook is effective.

NBA Netherlands also disseminates Dutch translations of the standards and reports that the 2016 ISA is the latest version to have been translated. The institute is in the process of implementing plans to translate the 2018 Handbook.

Current Status: Partially Adopted

Auditors are subject to ethical requirements established by the Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands) with oversight from the Netherlands Authority for the Financial Markets, as per the Accountancy Profession Act of 2014 (as amended).

NBA Netherlands reports that ethical requirements for the profession are based on, and are fully converged with, the 2016 IESBA Code of Ethics. The institute established plans to update its ethical requirements and will therefore converge its requirements with the 2018 Restructured IESBA Code of Ethics when it comes into effect on June 15, 2019.

Other professional accountants are 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 it monitors, analyses, notes, and comments on 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.

Current Status: Partially Adopted

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.

At various levels of government/federal, provincial, and municipal/public sector entities are obligated to adhere to the Dutch Chart of Accounts for the Public Sector, ensuring consistent and transparent financial reporting. While there are common accounting principles, there may be specific variations in treatment and disclosure requirements based on the nature of the entity.

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.

Current Status: Not Adopted

The Audit Firms Supervision Act of 2006 (as amended) provides the legal authority for the Netherlands Authority for the Financial Markets (AFM) to design and implement an investigations and disciplinary (I&D) system for audit firms. Individual auditors on the other hand, as per the Act on Disciplinary Jurisprudence of Accountants of 2008 (as amended), that are in violation of any rules or regulations are subject to the Ministry of Justice’s I&D system.

Both the AFM and Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands) are required under the Audit Firms Supervision Act of 2006 (as amended) to file and forward cases against individual auditors to the Ministry of Justice’s Disciplinary Court. NBA Netherlands established a Complaints Committee responsible for collecting and forwarding complaints to the Disciplinary Court. NBA Netherlands reports that these I&D systems are in line with SMO 6 requirements.

Other professional accountants may be regulated through their voluntary membership in the Netherlands Association of Registered Controllers (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.

Current Status: Adopted

As a member of the European Union (EU), the Netherlands is subject to the accounting and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations. Annual Accounts Title 9 of the Netherlands Civil Code (NCC) of 2016 (as amended) stipulates the requirements for preparation of financial statements, including applicable accounting standards and financial reporting thresholds. The Dutch Accounting Standards Board (DASB) is responsible for enacting financial reporting 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 – this includes banks, central credit institutions, insurers, and any enterprise, institution or public body forming part of one of the categories designated pursuant to Section 2 of the Audit Firms Supervision Act that makes it possible for the legislator to expand the class of PIEs. In addition, all companies in the Netherlands that use EU-endorsed IFRS Standards are also required to follow a part of the Dutch Accounting Standards (DAS) for Medium-sized and Large Entities, developed by the DASB. Banks, financial institutions, and credit institutions are subject to additional reporting requirements by the Dutch Central Bank while insurance companies also follow regulations outlined by the Dutch Authority for the Financial Markets.

For companies whose securities are not publicly traded, the DASB has outlined different frameworks based on size. Medium and large-sized companies can choose between the Dutch Accounting Standards for Medium-sized and Large Entities or use EU-endorsed IFRS combined with parts of the DAS for Medium-sized and Large Entities.

Small entities may choose one of four options/standards to prepare their financial statements: Book 2 of the Dutch Civil Code combined with fiscal valuations; Dutch Accounting Standards for small entities; Dutch Accounting Standards for medium sized and large entities; or IFRS Standards as adopted by the EU combined with a part of the Dutch Accounting Standards for medium-sized and large entities.

Current Status: Adopted

Relevant Organizations

• Dutch Accounting Standards Board (DASB)
• Koninklijke Nederlandse Beroepsorganisatie van Accountants (NBA Netherlands)
• Netherlands Association of Registered Controllers (VRC)
• Netherlands Authority for the Financial Markets (AFM)

Relevant Legislation

Act on Disciplinary Jurisprudence of Accountants of 2008 (as amended)

• Audit Firms Supervision Act of 2006 (as amended)
• Book 2 Dutch Civil Code
• Directive 2014/56/EU 
• Judicial and Criminal Records Information Act of 2002 (as amended)
• Regulation (EU) No 537/2014

Relevant Publications

• Accountancy Europe, Structure and Organisation of the Accountancy Profession. Key feature: The Netherlands, 2020.
• --, Member State Implementation of Directive 2014/95/EU, 2017.
• --, Organization of the Public Oversight of the Audit Profession in Europe, a Survey, March 2018.
• --, Definition of Public Interest Entities in Europe, March 2019.
• --, Defining a public interest entity: How to streamline the scope of EU audit rules across countries, 2022.
• --, Overview of the ISA adoption in the EU, 2015.

European Commission, Audit Directive – Transposition Status, Nov 2021.

European Commission, “Auditing of companies’ financial statements,” n.d.

• Deloitte, Annual Accounts in the Netherlands: A Guide to Title 9 of the Netherlands Civil Code, December 2017.
• IFAC & OECD, Accrual Practices and Reform Experiences in OECD Countries, February 2017.
• IFRS Foundation, IFRS Application Around the World, Jurisdictional Profile: Netherlands, July 2016.
• International Forum of Independent Audit Regulators (IFIAR), IFIAR Member Profile-AFM.
• NBA Netherlands, NBA Alert 27 Separation of Audit Services and Other Services and Mandatory Audit Firm Rotation, December 2012.
• NBA Netherlands, SMO Action Plan, 2019.
• VRC, SMO Action Plan, 2023.