New Audit Committee Rules For Listed Companies

As of 1 January 2017, the duties of audit committees at listed companies in the Netherlands have been extended following implementation of the European Audit Directive and Audit Regulation. There are also new requirements on the composition of these audit committees. A majority of the audit committee members, including the chairman, must now be independent. The chairman is appointed by the supervisory board, or by the committee members. The committee members must collectively possess the required expertise relevant to the sector in which the company operates. Extended duties of the committee include informing the board on the outcome of the statutory audit and explaining how the audit contributed to the integrity of financial reporting and what the role of the committee was in that process. The audit committee is also responsible for drawing up the selection process for the statutory auditor or audit firm.