The Financial Supervisory Authority of Norway published an inspection report on Deloitte AS covering the audit of one public interest entity for the 2024 financial year. It concluded that the engagement breached the Norwegian Auditor Act because the auditor did not obtain sufficient and appropriate audit evidence for the existence of inventory and the validity of sales transactions. The review formed part of Finanstilsynet’s risk-based quality controls of audit firms that audit public interest entities. It examined selected areas including inventory, revenue, acquisitions, deferred tax asset, assurance over the audited entity’s sustainability reporting, and the auditor’s mandatory continuing education and independence for the engagement. For inventory held in shops and at the central warehouse, Finanstilsynet found that the audit approach did not adequately respond to identified deviations and control weaknesses, including issues linked to broad access rights in IT controls, and that documentation of the entity’s cyclical counting process was insufficient to demonstrate that the full inventory was appropriately covered. It also found that the engagement partner’s reviews did not identify the inventory audit shortcomings, referencing ISA 220. For revenue, Finanstilsynet criticised reliance on a bank transaction list obtained from the audited entity when reconciling point-of-sale data to the general ledger and bank, and stated the list should have been obtained or confirmed directly by the bank or verified through direct transaction testing. The report follows supervisory meetings in November and December 2025 and is based on a preliminary report issued in February 2026 and Deloitte’s response in March 2026, in which the firm acknowledged that the audit file documentation did not support the risk assessment or provide sufficient audit evidence in the areas highlighted.
Norwegian Finanstilsynet 2026-03-25
Financial Supervisory Authority of Norway identifies Auditor Act breaches in Deloitte AS inspection of a 2024 public interest entity audit
The Financial Supervisory Authority of Norway published an inspection report finding that Deloitte AS breached the Norwegian Auditor Act in its 2024 audit of a public interest entity by failing to obtain sufficient and appropriate audit evidence over inventory existence and sales transactions. The authority identified deficiencies in the audit approach and documentation for inventory and revenue, including weaknesses in responses to IT control issues and reliance on a bank transaction list from the audited entity, and noted that engagement partner review did not detect these shortcomings. Deloitte acknowledged that the audit file documentation did not support the risk assessment or provide sufficient audit evidence.