Netherlands Association of Registered Controllers

Member | Established: 1988 | Member since 2014

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Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Methodology
Last updated: 11/2019
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SMO Action Plan

Status of Fulfillment by SMO

• SMO 1: Quality Assurance

  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.

  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 in the Netherlands but has indicated in its SMO Action Plan that, given that the QA system is in place and is operating efficiently, the focus is on ensuring the highest quality of education and training for members through the Quality Assurance Committee.

  Current Status: Sustain

• SMO 2: International Education Standards

  The initial professional and continuing professional development 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).

  Accountants may voluntarily join VRC and be subject to its regulations. VRC reports that professional education requirements for its members address all the relevant revised 2015 IES requirements.

  The VRC periodically engages in policy dialogues with accredited education providers and conducts reviews of existing programs to ensure continued alignment with the standards. It continuously monitors changes to the IES so that the association’s standards are compliant and kept up to date.

  The VRC also complies with SMO 2 by providing a range of educational material and learning opportunities for members to fulfill the mandatory continuing professional development requirements, and monitors and enforces compliance.

  The VRC entered a joint venture with the Netherlands Institute of Chartered Accountants to provide training and development programs, including online courses, host various events (conferences, seminars, etc.), and publish the Management Control and Accounting Journal.

  VRC is encouraged participate where relevant in sharing its perspective and experiences in implementing national accountancy education requirements that meet the revised IES as part of IFAC’s new approach to accountancy education.

  Current Status: Sustain

• SMO 3: International Standards on Auditing

  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.

  While the VRC has no direct responsibility for the adoption and implementation of standards issued by the IAASB, it promotes the implementation of the standards that have been adopted by offering courses, in cooperation with NBA Netherlands, in its continuing professional development program that include standard-related topics.

  The association assists members with keeping up to date on IAASB standards and pronouncements by providing access to IFAC resources, such as the IFAC Global Knowledge Gateway, on its website.

  Lastly, VRC participates in the international standard-setting process by providing comments on IAASB Exposure Drafts.

  Current Status: Sustain

• SMO 4: Code of Ethics for Professional Accountants

  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 (AFM), 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 VRC. The 2018 VRC Code of Professional Conduct is based on Parts A and C of the 2016 IESBA Code of Ethics for Professional Accountants, as these sections are the most relevant to professional accountants in business. The VRC Code of Ethics is reviewed every five years.

  The association supports members’ compliance with the Code of Ethics through: (i) the provision of printed complete and abridged versions in Dutch and English, and (ii) publication of updates and changes in the Code of Ethics on the VRC’s website and in its Management Control and Accounting Journal. It has instituted mandatory ethics training based on the fundamental principles of the Code of Ethics and on professional conduct, and incorporates material on ethical requirements into its initial professional development and continuing professional development curricula. The VRC also organizes events that allow members to discuss case studies that portray ethical dilemmas, and makes available 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

• SMO 5: International Public Sector Accounting Standards

  The Ministry of Finance is responsible for establishing public sector accounting standards at the central government level, while the Ministry of Internal Affairs has the authority to set standards for the local government.

  The central government is using a cash and commitments bookkeeping system, with two exceptions: departmental agencies that use the accrual basis, and expenditures related to “interest payments on central government debt,” which is presented on accrual basis.

  The VRC does not have any responsibility for the adoption of public sector accounting standards. It does, however, support the adoption IPSAS by raising awareness through: (i) continuing professional development courses on the issue of public sector accounting; (ii) providing access to IPSAS and guidelines that are available on the IFAC website; (iii) publishing special articles on the theme of public sector accounting in the Management Control and Accounting Journal; and (iv) conducting and publishing interviews with public sector accountants.

  The institute also participates in 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 on the topic.

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

  VRC is encouraged to provide more information on its activities to promote adoption of accrual-basis IPSAS. VRC is also encouraged to elaborate on any training support it offers its members that work in the public sector. It may consider developing a strategy outlining its involvement in public sector accounting issues and support it can provide to public sector accountants in the jurisdiction.

  Current Status: Review & Improve

• SMO 6: Investigation and Discipline

  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.

  Other professional accountants are regulated through their voluntary membership in the VRC. In accordance with its constitution, VRC established an I&D system to monitor and enforce compliance with professional standards, the Code of Ethics, and disciplinary regulations by its members who are management and financial accountants.

  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). standards and professional regulations.

  VRC publishes a detailed description of its investigation and disciplinary process on its website to support member’s compliance with applicable ethical requirements. It also 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, in order to ensure continued compliance with SMO 6.

  Current Status: Sustain

• SMO 7: International Financial Reporting Standards

  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.

  With no responsibility for the adoption and implementation of IFRS in the Netherlands, VRC focuses on supporting implementation through the provision of standard-related topics in initial professional development and continuing professional development courses. The VRC also provides updated information on IFRS through its website and magazine.

  Current Status: Sustain

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.