Current status
Before being presented to the General Meeting of Shareholders for adoption, the Company's annual financial statements as drawn up by the Executive Board must be examined by an external certified public accountant. The AAC advises on the (re)appointment of the external auditor, and the General Meeting of Shareholders has the authority to appoint the auditor. Should the General Meeting choose not to use this authority, the auditor is appointed by the Supervisory Board. The external auditor's assignment (including his remuneration) for the performance of audit activities is approved by the Supervisory Board, on the recommendation of the AAC.

Pursuant to the Sarbanes-Oxley Act, all the accounting firm's services outside the audit of the annual accounts are checked in advance by the AAC to ensure the auditor's objectivity and independence. In addition, the Sarbanes-Oxley Act stipulates certain services that may not be provided by the external auditor and requires companies to change their audit partner every five years. ARCADIS changed its partner in 2001 and 2006, in consultation with KPMG.

The quarterly accounts and quarterly reports are discussed with the AAC in preparation for their consideration by the Supervisory Board. This is done prior to the publication of the quarterly results and in the presence of the external auditor. The external auditor attends the meeting of the Supervisory Board; at which time, his report on his audit of the annual financial statements is discussed. The auditor also attends the Supervisory Board meeting; at which time, the half-year results are discussed.

Compliant with the Sarbanes-Oxley Act, the chairman of the Executive Board and the Chief Financial Officer since 2003 have had to submit a signed statement declaring the financial reporting to be complete, accurate, and truthfully produced, which is filed with the annual report that is submitted to the Securities and Exchange Commission (the Form 20-F).

Evaluation for the purposes of the Corporate Governance Code
ARCADIS subscribes to the principles regarding "Financial reporting" (V.1), "Role, appointment, remuneration and assessment of the functioning of the external auditor" (V.2) and "Relationship and communication of the external auditor with the organs of the company" (V.4).  ARCADIS does not have an internal auditor (V.3).

ARCADIS observes the associated best practice provisions:

• From the start of 2004, the (re)appointment of the auditor is included as a standard item on the agenda for the Annual General Meeting of Shareholders (V.2).
• From the start of 2004, the external auditor also attends the General Meeting of Shareholders of ARCADIS NV; at which time, he may be questioned on his audit activities and his statement on the fairness of the annual financial statements (V.2.1). 

Action
The following action will be taken to comply more fully with the best practice provisions:

• The Sarbanes-Oxley Act stipulates that internal risk management and control systems must be certified by the external auditor in the annual report published for the 2006 financial year. So that we can comply with this, the situation is being surveyed and evaluated, and existing procedures are supplemented and recorded as necessary (V.1.3 and V.4.3.c).