AFM report: audit procedures on fraud risks fall short

In January 2025 the AFM published the report 'Audit procedures on fraud risks fall short'. The report concludes that auditors are insufficiently critical in identifying and assessing fraud risks and that fraud risk analysis does not always lead to appropriate and sufficient audit procedures.

Improvements visible in November 2025

In November 2025, the AFM published a follow-up report: 'On the way to better fraud risk analysis', in which it notes that six OOB audit organisations have made meaningful improvements following the earlier June 2023 report. The NBA responds positively but also points to remaining areas for improvement.

Implications for audit practice

Auditors are expected to strengthen their fraud risk analysis, in accordance with NV COS 240 (The auditor's responsibilities relating to fraud in an audit of financial statements). This requires, among other things, a critical mindset, broader information sources and better alignment between identified risks and performed procedures.