Dutch companies, irrespective of their type, must observe the accounting principles, as described in the Dutch Generally Accepted Accounting Principles(Dutch GAAP). Companies must prepare and submit relevant and reliable information about their financial situation and the evaluation of the presented information must be made by a registered Dutch auditor.
The current economic climate demands more careful assessment and planning and our Amsterdam accountants are able to perform audit actions in the Netherlands by applying a solid and independent judgment with integrity and professional expertise. Our consultants have a strong reputation in the field of audit services. Our team of Dutch accountants is prepared to provide personalized tax assistance on the audit requirements available for each company type that can be registered in this country.
The following video offers a short presentation on the audit requirements available in this country:
Audit requirements and classifications in the Netherlands
In the Netherlands, a company is classified as small, medium or large in accordance with several criteria, as follows: the declared value of the balance sheet assets, the net turnover and the number of employees. Small and medium sized companies have assets with the value of maximum EUR 20 million and an annual turnover of EUR 40 million, while large companies have assets that exceed the value of EUR 20 million. In terms of the employed personnel, small companies have less than 50 employees, medium companies have a maximum of 250 employees and large companies have 250 or more employees.
According to Dutch law, only medium and large companies must perform an annual report audit. This activity must be performed by an independent, qualified and accredited auditor. In most cases, theauditor is appointed following a shareholder's meeting. In some cases, this decision can be taken by default by the managing board or by the supervisory board.
The audit process in the Netherlands
The appointed auditor reports the evaluation to the managing and supervisory boards of the company. After taking notice of all findings in the auditor's report, these bodies can determine and/or approve the company's financial statements. A voluntary audit can be performed by companies not required by law to perform such an action. The auditor's report will include information concerning the following:
•the management board's reports and if they meet the legal requirements;
•the adequate additional information and if this information is in accordance with the reality;
•all the company's financial statements and if they have been provided in accordance with the generally accepted accounting principles;
•these financial statements must reflect the accurate yearly financial situation of the company.
Users of financial statements are expected to be provided with a correct and complete audit report and an assurance on the financial statements of the company. The auditor may be liable if issuing an audit report incorrectly. The audit procedure in the Netherlands ends with the audit report.
What other types of information can the Dutch auditor provide?
Besides the verification of the company’s financial statements, the Dutch auditor can issue a set of additional opinions concerning the current situation of the legal entity he or she audited. The person is entitled to issue a statement regarding the financial documents he or she audited, on the legislation applicable to respective documents, but the following can also apply:
•a statement regarding the extent to which the audit was concluded for the respective company;
•a statement which presents if the financial statements are in accordance with the accounting law;
•a statement in which the auditor identifies certain matters that should be further analyzed;
•a statement on the manner in which the company’s managing board completed the financial documents;
•a statement describing if the report prepared by the company’s managing board provides the same information as the financial statements.
What are the publication requirements for Dutch financial statements?
Once the financial year is over, the company’s managing director has to publish the financial statements. This can be done in a period of 5 months since the end of the financial year. The annual report must also be prepared and the company’s accounting documents have to be filed with the Trade Register in the Netherlands, operating under the Chamber of Commerce.
The accounting documents have to be prepared in accordance with the size of the company. Thus, in the case of small and medium sized companies, it is necessary to file a condensed version of the balance sheet and notes, while in the case of a large company, full disclosure is necessary.
When preparing financial documents for large companies, the documents have to be completed by providing all the information and thus, full disclosure is necessary for the profit and loss account, the notes and principles of valuation, the management report and for the cash flow statements. Please note that if the company’s financial statements wereaudited, the company needs to file the audited documents with the above mentioned institution; our accountants in the Netherlandscan offer more details on the procedure.
Are there any exemptions on audit in the Netherlands?
Yes, besides the exemptions presented up until now regarding the obligations for performing an audit, investors should know that the Dutch legislation also provides audit exemptions in the case of group companies. However, in order to qualify for an audit exemption as a group company, specific conditions have to be met; it is necessary to know that all the conditions must be fulfilled as mentioned by the applicable law, and our accounting firm in the Netherlands can offer more information on these matters.
Certain audit exemptions can also apply to holding companies, in the sense that they are not required to complete consolidated financial statements. Our Dutch accountants can provide further assistance on the legal framework that allows certain categories of companies to benefit from various audit requirements.
What are the regulations for Dutch accounting and audit specialists?
In order to provide audit and accounting services in the Netherlands, the specialists in this field have to comply with a set of regulations. These professions are regulated by two main legal documents, namely the Audit Firms Supervision Act and the Auditors Profession Act. As stipulated by the first document, the supervision of these professions fall under the Netherlands Authority for Financial Markets (AFM), but only in the case of entities that provide audit services to companies listed on the country’s capital markets.
Companies which have as an object of activity the delivery of audit services to other parties must obtain a license from the AFM prior to starting their business activities. The institution can verify the performance of an audit company and any legal matters that can appear against auditors in the Netherlands are handled by the Disciplinary Court of Auditors.
Statutory audits in the Netherlands can be performed by two categories of auditors, namely persons who have the profession of accounting consultant or those who are registered accountants. In the case of both professions, the persons have to be registered with the Royal Netherlands Institute of Chartered Accountants.
According to Dutch law, companies must observe the annual publication requirements and deadlines. Our team of auditors andaccountants in the Netherlands can provide complete and professional audit services. You can contact our accounting firm in the Netherlands for detailed information, on the procedures available for a specific business structure.
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