Registration of third-country audit entities
A third-country audit entity must register with the AFM before it can issue an audit report regarding the audit of the annual or consolidated accounts of a company incorporated outside the EU/EEA whose transferable securities are admitted to trading on a regulated market in the Netherlands. The European Commission has published a list of all markets designated as ‘regulated markets’ on its website.
Without registration, issued audit reports have no legal effect in the Netherlands
Without complete registration, issued audit reports have no legal effect in the Netherlands. An exception applies in the case of third-country audit entities falling under a transitional period as established by the European Commission and for third-country audit entities that have submitted an application for full registration to the AFM.
Registration is however not required in order to be able to issue audit reports regarding the audit of the annual or consolidated accounts of companies that only issue bonds or other negotiable debt instruments admitted to trading on a regulated market in the Netherlands with a nominal value per bond or other debt instrument of not less than €50.000 or, in case of denomination in another currency, with a nominal value per bond or other debt instrument that on the date of issue has a value equivalent to not less than €50.000. Licensed audit firms are also not required to register as a third-country audit entity.
When should a firm register?
Generally speaking, a third-country audit entity must apply for registration with the AFM before it issues an audit report regarding the audit of the annual or consolidated accounts of a company incorporated outside the EU/EEA whose transferable securities are admitted to trading on a regulated market in the Netherlands. The audit reports issued will have legal effect in the Netherlands from such time as the AFM has received the application for registration. The AFM will in principle make its decision regarding such applications within 12 months.
Form H
This form applies if the audit client is not incorporated in one of the third countries for which the European Commission has allocated a transitional period. This form has to be downloaded from this website, completed in electronic form and submitted to the AFM by both electronic and surface mail.
Form I
This form applies if the audit client is incorporated in one of the third countries for which the European Commission has allocated a transitional period. This form has to be downloaded from this website, completed in electronic form and submitted to the AFM by both electronic and surface mail.
Prospective appointment notification form
This form applies if the audit entity has applied for registration by submitting Form H. This form should be completed by the third-country audit entity for each of the (co-) policymakers. This form has to be downloaded from this website, manually completed and submitted to the AFM by surface mail.
Integrity test form
This form applies if the audit entity has applied for registration by submitting Form H. This form should be completed by the third-country audit entity for each of the (co-) policymakers. This form has to be downloaded from this website, manually completed and submitted to the AFM by surface mail.
Updating registration information
Applicants shall notify the AFM without undue delay of any change of information contained in the application form and its annexes. This can be done by completing the update form and sending it to the AFM. Applicants that have submitted Form G or H must use update Form U1 and applicants that have submitted Form I must use update Form U2.
Registration fees
The AFM charges costs for processing the application for registration as a third-country audit entity. These registration fees have been determined by ministerial order [“Regeling toezichtskosten Wet toezicht accountantsorganisaties”]. The fees for a full registration (Form H) amount to €4.500. The registration fees for application for registration as a third-country audit entity are due in two terms.
- The registration fee for the receipt and initial processing of the application for registration as a third-country audit entity (first term) is due when the application form is submitted. This registration fee amounts to €850 and will be invoiced upon receipt of the application for registration by the AFM.
- The registration fee for the assessment of the application for registration as a third-country audit entity amounts to €3.650 and will be invoiced when the AFM commences with the assessment of the application for registration as a third-country audit entity (second term).
Furthermore, a fee is due per integrity test that is performed for each of the applicant’s (co-) policymakers. This fee amounts to €1200 (in 2012) per integrity test. For applications for registration under the transitional provisions as designated by the European Commission (Form I), only the first term (€850) is invoiced.