The Norwegian Financial Supervisory Authority (Finanstilsynet) has published an inspection report and decision following a regular supervisory review of Forvis Mazars AS, concluding that the firm had serious deficiencies in audit execution, including in the audit of a public interest entity, and has imposed an administrative penalty under the Auditor Act. The review also covered the firm’s governance and compliance with anti-money laundering requirements. Finanstilsynet reviewed 19 audit engagements and raised findings on one public interest entity engagement and five other engagements. The report identifies breakdowns in the firm’s quality management system and monitoring, inadequate adaptation of procedures to the specific legal requirements for public interest entity audits (including shortcomings in the audit report and the additional report to the audit committee), and the absence of sufficiently formalised consultation policies. Engagement-level findings included insufficient audit evidence in key areas such as revenue, weaknesses in procedures addressing the risk of management override of controls, deficiencies in the documented use and oversight of IT specialists as “experts”, and inadequate written communication of significant matters to boards and those charged with governance. Finanstilsynet also criticised acceptance and continuance assessments, including cases involving repeated late financial reporting and an unlawful loan under the Norwegian Companies Act, and highlighted errors in multiple 2023 audit opinions where going-concern emphasis was used without corresponding note disclosures. The administrative penalty was set at NOK 700,000, with the firm’s 2023 revenue (NOK 82 million) referenced in the assessment. Forvis Mazars may appeal the decision within three weeks of receipt. Finanstilsynet expects the firm to perform root-cause analysis and implement corrective actions in line with International Standard on Quality Management 1 (ISQM 1) to prevent recurrence, and the firm has outlined measures it has already initiated.
Norwegian Finanstilsynet 2025-07-07
Norwegian Financial Supervisory Authority imposes NOK 700000 penalty on Forvis Mazars for serious audit quality failings
The Norwegian Financial Supervisory Authority (Finanstilsynet) has imposed a NOK 700,000 penalty on Forvis Mazars AS for serious deficiencies in audit execution, including a public interest entity audit. The report highlights issues in the firm's quality management, governance, and compliance with anti-money laundering requirements, citing inadequate audit evidence, procedural weaknesses, and errors in audit opinions. Finanstilsynet expects corrective actions in line with International Standard on Quality Management 1 (ISQM 1).