The result has been that companies have been changing auditors too quickly. According to the European directive – which supersedes Dutch law – companies do not need to change auditors until far later than provided by Dutch law and desired by the Minister. Monique explains this in more detail in the front-page article in Het Financieele Dagblad and in an interview on BNR news radio.

According to the European directive, and leaving aside the exceptions contained in the transitional rules, auditors will be able to continue to audit a company’s accounts for a period of 10 years after either the effective date or application date of the directive (2014 or 2016, respectively). ‘In other words,’ says Monique, ‘the European directives permit auditors to continue performing statutory audits for a company for 10 years after date x, while Dutch law imbues the rule with retroactive effect – so the auditors can no longer perform that work for a company as of date x.’

How this situation came to be remains a mystery. Perhaps the pressure to take political action and the absence of reflection that pressure caused played a role. But we ‘understand that the Minister intends to remedy the situation.’  

The consequences cannot be predicted at this point in time. The fact is that both businesses and auditors ‘have been put in an unnecessary situation by the legislature.’ Whether and how businesses will respond to this remains to be seen. 

You can listen to the BNR interview and read the article on Fd.nl (membership required).