The Dutch Authority for the Financial Markets published a supervisory study on fraud risk analysis in statutory audits, finding that OOB audit firms have made progress in addressing earlier shortcomings but that sustained alertness and further strengthening are needed as fraud risks rise and evolve, including through artificial intelligence. The review covered six OOB audit firms and twelve statutory audits and assessed follow-up to issues raised in the earlier publication Scherper op frauderisico’s. The AFM reports improved quality of fraud risk analyses, tightened guidance and procedures, and greater use of awareness initiatives, coaching, training and fraud specialists. It also highlights remaining gaps, including the need for better monitoring and effectiveness measurement of implemented measures, deeper root-cause analysis that considers behavioural and cultural factors, a more professionally sceptical approach when understanding the entity and its environment, and clearer steps to identify the presumed fraud risk related to revenue. The AFM calls on all audit firms to continue the actions already underway and implement the report’s recommendations.
Dutch Authority for the Financial Markets 2025-11-20
Dutch Authority for the Financial Markets finds OOB audit firms improving fraud risk analysis but calls for stronger effectiveness testing
The Dutch Authority for the Financial Markets released a study on fraud risk analysis in statutory audits, noting progress by OOB audit firms but emphasizing the need for ongoing vigilance as fraud risks, including those involving artificial intelligence, evolve. The study, covering six OOB audit firms and twelve statutory audits, found improvements in fraud risk analyses but identified gaps in monitoring, root-cause analysis, and scepticism. The AFM urges all audit firms to continue efforts and adopt the report's recommendations.