The Dutch Authority for the Financial Markets has published findings from a joint review with BFT showing that audit firms with a regular licence are generally alert to sanctions risks linked to clients with Russian activities, but their control frameworks need to improve. The review focused on the role of accounting firms both in complying with Russia sanctions themselves and in checking whether their audit clients comply, with the AFM pointing to weaknesses in client due diligence, quality systems and sanctions risk management. The AFM reviewed quality systems and business operations at six regularly licensed firms across about 30 statutory audits, while BFT examined anti-money laundering customer due diligence and monitoring obligations at three firms in 10 files. Positive practices included refusing or conditionally accepting audit clients with Russian activities, consulting the Dutch professional body for accountants or trade control authorities on sanctions interpretation, screening clients against sanctions lists, carrying out internal portfolio-wide risk screening and issuing qualified opinions or disclaimers where appropriate. Areas for improvement include making policies more specific on identifying, managing, monitoring and evaluating sanctions risks, making better use of sanctions law expertise, independently checking management claims and sanctions lists, assessing whether audit limitations affect the audit opinion, watching for circumvention through third countries and considering whether sanctions breaches or evasion should be treated as a fraud risk. The AFM also noted that it is still examining whether unqualified opinions issued in two statutory audits were appropriate given limitations in auditing Russian activities. The AFM expects firms to reflect on the good practices and address the identified weaknesses. The AFM and BFT are working with the Netherlands Institute of Chartered Accountants and SRA to help the sector strengthen sanctions risk controls and reduce incidents.
Dutch Authority for the Financial Markets2026-06-18
Dutch Authority for the Financial Markets finds accountants need stronger controls over Russia sanctions risks
The Dutch Authority for the Financial Markets said audit firms are generally aware of Russia sanctions risks, but need stronger controls over client due diligence, quality systems and sanctions risk management. Its joint review with BFT found good practices in client screening and audit reporting, but also gaps in sanctions expertise, verification of management claims, treatment of audit limitations and consideration of sanctions evasion as a fraud risk. The AFM expects the sector to act on those findings.