NETHERLANDS Law and Practice Contributed by: Manon Cremers, Heleen Kersten, Frédérique van der Wegen and Sandra Rietveld, Stibbe
Directors’ Duties for more information on exter - nal liability in bankruptcy.
Further rules on the selection and appointment of auditors of public interest entities are included in Regulation (EU) 537/2014 on specific require - ments regarding statutory audit of public interest entities (the “Audit Regulation” ) and in the CG Code. The audit committee plays an important role in preparing the appointment. Public interest entities must regularly change audit firms. An audit firm may not perform that function for more than ten consecutive years. The same firm may not carry out the statutory audit again until four years have passed. Within the relevant audit firm, the auditor responsible for the audit may not be responsible for the audit report for more than five years. 7.2 Requirements for Directors Concerning Management Risk and Internal Controls The management board is responsible for iden - tifying and managing the risks associated with the company’s strategy and activities. The management board informs the supervisory board about the company’s strategic policy, its general and financial risks and its internal control system at least once a year, to enable the super - visory board to perform its supervisory duties. Additional Requirements for Dutch Listed Companies Based on the CG Code The CG Code contains several best practices to further strengthen risk management and disclo - sure on “comply-and-explain” basis: • a Dutch listed company must have adequate internal risk management and control sys - tems;
7. Audit, Risk and Internal Controls 7.1 Appointment of External Auditors Dutch corporate law requires an audit of the financial statements for all large and medium- sized companies. The external auditor must examine whether the annual accounts provide the requisite legal disclosures and provide a true and fair view, whether other parts of the financial report com - ply with the statutory requirements and whether the management report conflicts with the annual accounts or contains any other material mis- statements. The external auditor reports on their audit to the management board and the supervisory board, and records the result of the audit in an inde - pendent auditor’s report. Appointment of the External Auditor Book 2 of the Dutch Civil Code provides the fol - lowing regarding the appointment of an external auditor: • the general meeting appoints an external auditor; • if the general meeting fails to do so, the supervisory board is authorised to make the appointment; and • in the absence of a supervisory board, the management board is authorised to appoint the external auditor. If an NV/BV is a public interest entity, the appoint - ment must be notified to the AFM.
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