The administrative court in Rotterdam has torn up fines levied by the financial services watchdog on accountants groups PwC and EY, saying there is insufficient evidence that they had not done their jobs properly.
Last year, the AFM fined the big four accountancy firms a total of €6m after an investigation which found Deloitte, EY, KPMG and PwC did not achieve the required duty of care and were lax in checking corporate accounts in 2012 and 2011.
The biggest fine – €2.2m, went to EY while PwC was fined €845,000. The other two firms did not appeal against the AFM’s decision.
EY and PwC said that the AFM was unable to assess whether or not they had done a proper job on the basis of random samples and the Rotterdam court has now agreed with them.
Mistakes made in individual files cannot be used to conclude that the entire operation is failing to meet quality standards, the court said.
According to the NRC, the ruling ‘puts a bomb underneath the AFM’s approach to monitoring compliance’, which is always based on random samples.
The AFM can still appeal against the ruling.