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UK / Netherlands Regulatory update

This update provides information on the regulatory and market landscape in the UK and Netherlands, including reports, reviews, and proposed remedies. It covers topics such as audit quality, corporate governance, and the future of the audit profession.

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UK / Netherlands Regulatory update

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  1. UK / Netherlands Regulatory update David Isherwood Bdo Jan 2019

  2. UK Regulatory / market landscape

  3. Regulatory / market landscape CMA report (146 pgs) - proposed preferred remedies “…while most people would never read an auditor’s opinion on a company’s accounts, “tens of millions of people depend on robust and high-quality audits. If a company’s books aren’t properly examined, people’s jobs, pensions or savings can be at risk.” - CMA chairman Andrew Tyrie

  4. Regulatory / market landscape Kingman review (96 pgs) -- 83 recommendations “…[regulator needs] new leadership, new mission, new powers and new funding”, calling for the creation of a new body, which he dubbed the Audit, Reporting and Governance Authority (Arga)…” – Sir John Kingman

  5. Regulatory / market landscape UK Parliament - BEIS Select Committee – Rachel Reeves “…Current audit market is ‘broken’ and that failings in audits, including at Carillion, have helped to undermine public trust in business… The current inquiries by the CMA and Sir John Kingman are welcome and necessary. But, too often in the past corporate and regulatory failures have been followed by reviews which have been left to gather dust rather than result in concrete action. Our Committee’s inquiry on the future of audit seeks to ensure these reviews are acted upon swiftly and effectively and that they genuinely deliver the improvements to audit quality and corporate governance which businesses, investors, pension-holders and the public expect."

  6. Regulatory / market landscape Brydon review The independent review will look at the quality of standards delivered by UK auditors and what more can be done to make them “more effective and reputable” as well as how better to meet public, shareholder and investor expectations – Greg Clark

  7. Regulatory / market landscape PremSikka review (172 pgs) • Calls for a breakup of the Big Four. • Recommending the audit sections of professional services firms be split off from their other divisions, as well as backing market caps, joint audits and the creation of a state-backed body to carry out audits of public interest entities such as banks, building societies, credit unions and major investment firms. • It said: “the auditing industry is in disarray, dysfunctional and stumbles from one crisis to another

  8. NL Regulatory update

  9. Audit Profession in The Netherlands • History of self-regulationby Dutch Professional body (Royal NBA) andOversightby Dutch Authorityforthe Financial Markets (AFM), even after ‘crisis in audit’, i.e.: • September 2014: 53 measures • Public Interest Steering Committee (2017): Audit Change Agenda • Reviewedby Monitoring Commission Audit (MCA): • Insufficientprogress • Wickedproblems • AFM: (still) notsatisfiedwith audit quality

  10. Final call forselfregulation • November 21st 2018: “Day of the Auditor” (organizedby Royal NBA) • Minister of Finance Mr. Hoekstra announcestheinstitution of an independent ‘CommitteeFuture of the Audit Profession’ which will investigate how to improve quality of the audit in a sustainable way as well as possible structural changes in how the audit sector is organized. • The Committee will at least investigate: • Possibilities of ‘audit only’ firms • Intermediair model • Audit of large non-public entities by a Governmental audit firm • The committee must keep in mind the international context of the profession. • The committee needs to report within a year. (so end of 2019, early 2020). • Expectation is that the Committee will look closely to what happens in the UK and will come with extensive proposals to change the (organization of the) Audit Profession

  11. Vulnerabilities in the structure of the audit sector (report of AFM, November 21st 2018)

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