Norwegian Financial Supervisory Authority imposes NOK 600,000 penalty on Unic Revisjon AS for audit evidence failures on inventory and deferred tax assets

The Norwegian Financial Supervisory Authority has published a supervisory report with a decision imposing an administrative penalty of NOK 600,000 on audit firm Unic Revisjon AS for breaches of the Norwegian Auditor Act linked to insufficient and inappropriate audit evidence in multiple engagements. The inspection reviewed 15 audit engagements and identified serious shortcomings in two areas. For inventory, the auditor did not obtain sufficient appropriate audit evidence on the existence and condition of inventories as at 31 December 2023 in ten engagements, including by not attending physical stocktakes and not documenting why attendance was impracticable or performing adequate alternative procedures. For deferred tax assets, four engagements lacked sufficient audit evidence supporting the valuation as at 31 December 2023, including failures to perform required audit procedures for accounting estimates under ISA 540 and, in one case, to understand and evaluate an external expert’s work under ISA 500. Finanstilsynet also linked the breaches to inadequate internal policies, routines and quality management at the firm; the penalty was reduced from the previously notified NOK 750,000 after considering new information about the firm’s financial capacity. Unic Revisjon AS may appeal the decision within three weeks of receipt. The firm has submitted a root-cause analysis and action plan and has started remedial measures to prevent recurrence.