The Norwegian Financial Supervisory Authority has published an inspection report and decision imposing an infringement fee of NOK 4,000,000 on Deloitte AS after a routine firm inspection found the auditor had not sufficiently ensured its quality management system functioned as intended and that multiple audit engagements contained serious deficiencies, including audits of public interest entities. The review covered the firm’s governance, audit performance and compliance with anti-money laundering obligations. The inspection, conducted in November 2024, examined selected parts of the audits of two public interest entities and around 25 other engagements, and identified breaches of the Auditor Act provisions on audit performance, reporting, acceptance and continuance, and communication with management and boards. Findings included insufficient and inappropriate audit evidence and lack of professional scepticism in testing expected credit loss provisions under IFRS 9 at a savings bank, inadequate work around a bank merger including failure to identify incorrect accounting treatment under IFRS 3, and no planned or performed audit procedures for the valuation of a bank building later shown to be overstated. The authority also found independence and transparency breaches where non-audit services were provided to an audit client without audit committee pre-approval and without required disclosures, alongside material weaknesses in engagement quality reviews, late reviewer involvement, and quality safeguards failing to detect breaches, with some issues recurring from earlier supervision. Deloitte described targeted remedial measures and changes to its quality management system, which the authority stated it will follow up in later supervisory work. Deloitte may appeal the decision within three weeks of receipt, with the Financial Supervisory Appeals Board as the appeal body, and collection of the fee to follow after the appeal deadline or, if appealed, after the appeal is decided.
Norwegian Finanstilsynet 2025-09-01
Norwegian Financial Supervisory Authority fines Deloitte AS NOK 4 million for serious audit quality management and execution failures
The Norwegian Financial Supervisory Authority imposed a NOK 4,000,000 fee on Deloitte AS after finding serious deficiencies in its audit engagements and quality management system. The inspection revealed breaches in audit performance, reporting, and anti-money laundering compliance, including insufficient audit evidence and lack of professional scepticism. Deloitte has outlined remedial measures, and the authority will monitor these in future activities.