Norwegian Financial Supervisory Authority issues inspection report on Krynicka Regnskap AS citing governance and documentation deficiencies

The Norwegian Financial Supervisory Authority has published an inspection report on the accounting firm Krynicka Regnskap AS, identifying errors and shortcomings in compliance with requirements for business governance and the performance of accounting engagements. Key weaknesses related to the documented review of clients’ internal routines and reconciliations, and the firm stated in its response that the issues have been rectified. The review found inadequate measures and documentation to understand customers’ ownership and control structures under anti-money laundering rules, an insufficiently defined cooperation agreement for the contracted state-authorised accountant’s roles and responsibilities, and weaknesses in time recording documentation under the bookkeeping rules, including for contracted personnel. Testing of three engagements (based on 2024 documentation) identified missing or deficient year-end reconciliation documentation across the files (assessed as 50% for one engagement, 16% for a second and 18% for a third), no documented review of clients’ relevant internal routines, engagement agreements that were not signed by the firm at the time of inspection, and insufficient written follow-up with clients on breaches and issues requiring escalation under good accounting practice. The firm provided updated routines and, for the contracted accountant arrangement, a new signed agreement, which the Authority treated as remediation for several findings. The Authority maintained that the firm should put in place a signed written contingency arrangement with another state-authorised accountant or accounting firm to reduce vulnerability risk, and requested that a copy of the letter be sent to the auditor.