Financial Supervisory Authority of Norway finds major Auditors Act breaches at RCC Revisjon and orders root cause analysis and remediation plan

The Financial Supervisory Authority of Norway (Finanstilsynet) published an inspection report on newly established audit firm RCC Revisjon AS, identifying material breaches of the Norwegian Auditors Act linked to both engagement acceptance and the execution of several audits. The review, based on audit documentation for 2023 and 2024 and expanded following a referral from the Norwegian Institute of Public Accountants, found repeated shortcomings in acceptance assessments and audit performance. Deficiencies included accepting engagements where predecessor auditors had raised issues such as illegal shareholder loans, breaches of rules on withholding tax funds, weak equity and going concern uncertainty without a documented, realistic remediation plan, and in one case without making the required enquiry to the predecessor auditor. Across multiple engagements, the audit files did not evidence sufficient understanding of the control environment and internal controls, robust risk assessment, or adequately designed procedures for identified risks including management override, and showed inadequate audit evidence and documentation for key areas including opening balances, revenue, receivables, inventory, other current liabilities and going concern. Finanstilsynet requires the firm to carry out and document a root cause analysis and remediation under International Standard on Quality Management 1 (ISQM 1) and submit a detailed action plan with concrete measures by 1 March 2026, and indicated it will consider conducting a new inspection in 2026.