Regulatory Alerts2025-01-30
Audit procedures for fraud risks are insufficient
The Dutch Authority for the Financial Markets (AFM) issued a report in January 2025 concluding that auditors frequently fail to perform specific and in-depth procedures to address fraud risks. The regulator found that in 23 of 32 tested statutory audits, accountants did not obtain sufficient appropriate audit evidence, often relying on standard procedures rather than adapting the nature, timing, and extent of work to specific client risks. The AFM demands that audit firms take greater responsibility by improving their professional skepticism and implementing concrete measures to enhance the quality of fraud risk responses.
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