Amendment Act on the Audit Sector for Strengthening Quality and Governance in the Sector

APPENDIX SECTOR REPORT Amendment Act on the Audit Sector: What is the Impact on Your Organization? In brief - The Amendment Act on the Audit Sector is expected to enter into force on 1 July 2026. With this publication – intended for all audit firms – the AFM highlights five topics regulated in this Act that may impact your audit firm. APRIL | 2026

© AFM 2026 | Amendment Act on the Audit Sector: What is the Impact on Your Organization? 2 Summary Through the Amendment Act on the Audit Sector, the Minister of Finance has adopted additional measures to contribute to the quality of statutory audits. The quality of statutory audits forms the basis for trust in the audit and is a prerequisite for trust in the audit sector. The measures support, among other things, a quality-oriented culture within audit firms. As the name of the Amendment Act on the Audit Sector indicates, this is a law that introduces amendments to other laws. The content of this Act must be read in conjunction with the Audit Firms Supervision Act (Wta) for topics 1, 2, and 5 below, and in conjunction with the Act on the Audit Profession (Wab) for topics 3 and 4. This publication brings five topics from the Amendment Act on the Audit Sector to the attention of audit firms and their policy makers. Some topics concern specific groups of audit firms; others impact all audit firms. The AFM urges policy makers of audit firms to familiarize themselves with these topics to assess their impact on their own organization and determine what actions may be necessary.

1. Strengthening governance of the largest audit firms
2. Clarification of the audit firm's shared responsibility for the quality of statutory audits
3. Audit quality indicators for OOB audit firms
4. Appointment authority for public interest entities without an auditor
5. Reporting deficiencies in a statutory audit to the AFM Do you have questions about the Amendment Act on the Audit Sector? Please send an email to wta@afm.nl.

© AFM 2026 | Amendment Act on the Audit Sector: What is the Impact on Your Organization? 3

1. Strengthening governance of the largest audit firms The Act introduces new governance requirements for audit firms holding a standard license to perform statutory audits (AO’s-RV) that meet the following size criteria for three consecutive financial years: • Revenue from statutory audits of at least €3,000,000 per financial year; and • At least 150 statutory audits per financial year. For these largest AO’s-RV, the following three governance requirements will apply through an amendment to the Audit Firms Supervision Act (Wta, inserted Article 24c), which currently already apply to audit firms licensed to also perform statutory audits at public interest entities (OOB-AO’s): • Suitability requirement for policy makers belonging to three collectives (daily policy makers of the audit firm, daily policy makers of the highest network unit in the Netherlands, members of the internal supervisory body) of the audit firm (Article 16, third to sixth paragraphs, Wta); • Daily policy makers of the audit firm shall not perform any other activities than those of daily policy maker of the audit firm, unless the supervisory body grants approval for this (Article 16a Wta); • Mandatory establishment of a system of independent internal supervision over the policy and general affairs of the audit firm, which includes a supervisory body consisting of at least three natural persons (Article 22a Wta). Under a transitional provision in the Amendment Act, the three aforementioned requirements will apply one year after the entry into force of Article 24c Wta to AO’s-RV that already meet the size criteria of that article for three financial years at the time Article 24c Wta enters into force. If Article 24c Wta enters into force on 1 July 2026, this means that the three aforementioned requirements will apply from 1 July 2027. If Article 24c Wta enters into force on 1 July 2026, this means for the suitability requirement that the largest AO-RV may only appoint natural persons belonging to the three collectives to office after the AFM has determined the suitability of the intended policy maker. Regarding the natural persons belonging to the three collectives who are already in office on or before 30 June 2027, the AFM must rule on the suitability of these policy makers within one year from 1 July 2027. The AFM is already in contact with audit firms that it believes qualify (possibly) as the largest AO’s-RV. If you believe your audit firm also qualifies as the largest AO-RV, and your organization has not yet been approached by the AFM regarding the above, we request that you contact us by sending an email to: wta@afm.nl. For the largest AO’s-RV and OOB-AO’s, the powers of the required internal supervisory body are supplemented with certain approval rights (amendment to Article 22a Wta). These concern approval rights regarding a proposal for profit distribution, entering into or terminating a long-term cooperation of the audit firm, acquiring (or significantly modifying) a participation in another company, making investments, and terminating the employment contracts of a significant number of employees.

© AFM 2026 | Amendment Act on the Audit Sector: What is the Impact on Your Organization? 4 2. Clarification of the audit firm's shared responsibility for the quality of statutory audits For all AO’s, the Act clarifies the shared responsibility of the audit firm for the quality of its individual statutory audits (amendment to Article 18 Wta). The amendment stipulates that the quality management system is designed in such a way that the quality of the statutory audits is secured. This gives the provision on the quality management system a quality objective. This clarification of the shared responsibility of audit firms for the quality of statutory audits reflects a development in the audit profession where the quality of a statutory audit is largely influenced by the audit firm, alongside the individual auditor. This requirement will be further specified in subordinate legislation by imposing requirements on the quality management system to give effect to this shared responsibility. 3. Audit quality indicators for OOB audit firms For OOB-AO’s, a requirement will apply under the Act on the Audit Profession (Wab) to periodically report to the Dutch Institute of Chartered Accountants (NBA) on quality indicators, commonly referred to as audit quality indicators (insertion of Articles 45a-45c Wab). The NBA will subsequently make the reported information public. These are indicators that provide insight into factors influencing the quality of statutory audits. The introduction of quality indicators cannot, on its own, be expected to have a quality-enhancing effect. However, data do contribute to fostering good discussion and enabling informed decision-making by all stakeholders, such as audit clients but also the audit firms themselves. The quality indicators to be reported will be established in subordinate legislation under the Act, namely a ministerial regulation. 4. Appointment authority for public interest entities without an auditor For OOB-AO’s, it is relevant to take note of the future regulation whereby – as an ultimum remedium – an OOB audit firm will be assigned to a public interest entity (OOB) (insertion of Articles 54a-54e Wab). The Minister of Finance has informed the House of Representatives that he wishes to bring this regulation into force only when he is convinced that there is an OOB that has everything in order but has still been unable to contract an audit firm. The regulation gives an OOB that, despite reasonable and timely efforts, cannot find an audit firm willing to accept the assignment for a statutory audit of their financial reporting, the possibility to submit an application to the Dutch Institute of Chartered Accountants (NBA) to be assigned an OOB-AO. The NBA will gain the authority to decide on the request of an OOB for the assignment of an OOB-AO. This regulation does not yet enter into force upon the entry into force of the rest of the Amendment Act, but only at a later moment when the minister decides that a necessity exists for this.

© AFM 2026 | Amendment Act on the Audit Sector: What is the Impact on Your Organization? 5 5. Reporting deficiencies in a statutory audit to the AFM For all AO’s, this Act limits the confidentiality obligation for audit firms (amendment to Article 20 Wta) to enable reporting to the AFM of possible deficiencies in a statutory audit. With this legislative amendment, the obligation of audit firms to keep confidential data or information secret does not apply if they are provided to the AFM in connection with reporting a possible violation of the European Audit Regulation or the Wta, as identified by an audit firm. A possible violation of the Wta may occur, for example, if an audit firm takes over a statutory audit from another audit firm and finds irregularities in the previous audit. The AFM can include the reports in its supervision of audit firms and their external auditors. In this way, these reports can contribute to the sustainable improvement of the quality of statutory audits and thereby increase trust in the audits and the sector. Such a report of deficiencies in a statutory audit can preferably be submitted by email (wta@afm.nl).