Financial Accounting Scandals in the Netherlands
The accounting profession in the Netherlands is partially founded on a large financial fraud in the 1870s in Rotterdam (the so-called Pincoffs affair). Before 1879, the Rotterdam merchant Pincoffs had achieved high esteem both economically and politically. In one of his companies, the Afrikaansche Handelsvereeniging, which was converted to an NV (limited company) in 1869, management falsified the books and the balance sheet. This was to conceal the fact that the company’s West African operations were failing. The withdrawal of foreign short-term credit by Pincoffs led the supervisory board of the Afrikaanse Handelsvereeniging in Spring 1879 to suspect a financial fraud and the subsequent investigation revealed a fraud of DFL 2.8 million (which was a large amount in those days). It would be about 100 million US dollars today.
In the criminal case in 1880 against Pincoffs amongst others, it came to light that a falsified profit of DFL 2 million was in fact a loss of DFL 8 million. Two bookkeepers of the Afrikaansche Handelsvereeniging had been forced by Pincoffs to cook the books. The supervisory board had also failed in its duties. They had neither checked the books, nor compared the balance sheets with the books. The supervisory board had not found it necessary to check the books as there was an atmosphere of dignity, decency and friendship between them and Pincoffs. Consequently, Pincoffs ...