The Dutch arms of three major accountancy firms – Deloitte, PwC and EY – have been fined millions of dollars after hundreds of staff in the Netherlands were found to have cheated in mandatory professional exams.

The US Public Company Accounting Oversight Board (PCAOB) fined Deloitte and PwC $3 million (€2.6 million) each, while EY received a $2.5 million (€2.1 million) penalty. Staff at the firms were found to have shared answers or worked on exams together, according to a joint investigation by the PCAOB and Dutch financial markets regulator AFM.

The fraud involved tests that accountants must pass to show their knowledge is up to date — a crucial requirement given their role in verifying the financial accounts of major companies. KPMG received a record fine of $25 million last year over similar issues.

The exam fraud scandal erupted in 2022 when a whistleblower went public with allegations of cheating at KPMG. Shortly afterwards the company then confirmed at least 500 workers at KPMG in the Netherlands had cheated during their compulsory exams.

The scandal led financial regulator AFM to order all the big accountancy firms to carry out an internal investigation into possible cheating. In October 2023, Deloitte Nederland said some of its workers too had been swapping answers. PwC said the same last October and  EY followed in November.

The AFM said the misconduct stemmed from time pressure, commercial interests, a lack of leadership and poor examples set by senior staff. The three firms have already begun to address the underlying problems, the regulator said.

All three companies will now be placed under stricter supervision by the AFM, as was previously the case with KPMG.

“The credibility of accountants must be beyond doubt,” AFM board member Hanzo van Beusekom said in a statement.

The PCAOB issued the fines because the firms audit listed companies that operate in both the Netherlands and the US, including ASML and ING.

Although the fines are substantial, they are smaller than the penalty imposed on KPMG, where more serious wrongdoing was uncovered. A former KPMG board member was even banned from the profession for personal involvement in the fraud.

Two smaller accountancy firms, BDO and Mazars, are also conducting internal investigations into possible exam fraud.