Norwegian Financial Supervisory Authority publishes inspection report on PricewaterhouseCoopers after IAS 36 impairment misstatement at a public interest entity

The Norwegian Financial Supervisory Authority (Finanstilsynet) has completed an inspection of PricewaterhouseCoopers AS following errors identified in the 2022 financial statements of a public interest entity, where the model used to determine recoverable amount for impaired assets was not in line with IAS 36 Impairment of Assets. The entity calculated that the misstatement arising from the incorrect accounting principle exceeded the auditor’s materiality threshold, and PwC has acknowledged weaknesses in its audit work and set out remedial actions. Finanstilsynet asked the audit firm on 12 February 2025 to review its audit of the relevant financial statement items for 2022 and 2023, and received PwC’s explanation, root-cause analysis and supplementary information, which was also discussed in a meeting. PwC concluded that shortcomings in the audit meant the engagement team did not identify that the applied accounting principle was inconsistent with IAS 36; PwC has also audited the 2024 accounts, including the correction of the error under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Finanstilsynet has taken PwC’s statements and information on implemented and planned measures on record and will follow up the measures in future supervisory work.