Both Deloitte and Ernst & Young were fined by the AFM for allegedly violating Section 14 of the Audit Firms Supervision Act. This Section sets forth that audit firms must ensure that their external auditors comply with applicable regulations dealing with professional conduct.
Deloitte
On 15 February 2012, the AFM imposed a EUR 54,450 fine on auditing firm Deloitte. The AFM had carried out an investigation into ten audits performed by Deloitte in 2008. According to the AFM, the auditors fell short of standards on one or several elements of the audit in each of the ten files concerned. In two instances, the AFM inter alia found that there had been indications of fraud that were insufficiently investigated by Deloitte.
Ernst & Young
On 9 November 2011, the AFM also levied a EUR 54,450 fine on auditing firm Ernst & Young. In ten audit files that were examined, the AFM found that Ernst & Young had carried out audits without adequately ensuring that its external auditors complied with the applicable rules and audit standards. In six of these ten files, the AFM found that the external auditors had obtained insufficient audit information. Where audit information was absent and Ernst & Young failed to demonstrate that the relevant audit duties were fulfilled, the AFM concluded that Ernst & Young failed to comply with applicable rules and regulations.
Ernst & Young filed an objection against early publication of the fine with the Rotterdam Court in interlocutory proceedings. On 19 January 2012, the court ruled that Ernst & Young failed to do what is required to ensure its external auditors comply with the applicable laws and regulations and allowed the AFM's decision to be published.
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