The Financial Supervisory Authority of Norway has published a supervisory report and decision imposing an administrative penalty of NOK 50,000 on an audit firm after reviewing its audit of a client licensed as an investment firm. The authority found significant shortcomings in the auditor’s business understanding and risk assessment work, alongside breaches of key statutory duties and auditing standards, and required the firm to implement measures to prevent recurrence. The review focused on the audit of the client’s 2024 financial statements and identified, among other issues, the incorrect acceptance of financial statements prepared under the accounting rules for small entities despite sector-specific rules that exclude investment firms from using that framework. Finanstilsynet also found insufficient and inappropriate audit procedures and documentation supporting a material deferred tax asset (recorded at NOK 4.2 million) and the valuation of a significant investment in a subsidiary (cost recognised at NOK 8.9 million), as well as inadequate assurance that information attested for submission to the Norwegian Tax Administration complied with law and regulation, including matters linked to related-party use and rental of leisure properties in Norway and France. Finanstilsynet had initially notified a NOK 100,000 penalty but reduced it to NOK 50,000 after receiving additional documentation and explanations and taking into account the audit firm’s financial capacity. The authority expects the audit firm to analyse why the breaches occurred and to put in place effective remedial actions to avoid continued or repeated non-compliance.
Norwegian Finanstilsynet 2025-11-05
The Financial Supervisory Authority of Norway imposes a NOK 50,000 penalty on an audit firm for serious deficiencies in an investment firm audit
Norway's Financial Supervisory Authority fined an audit firm NOK 50,000 for significant shortcomings in auditing an investment firm, including breaches of statutory duties and standards. Issues included incorrect financial statement acceptance, inadequate procedures, and insufficient documentation. The penalty was reduced from NOK 100,000 after reviewing additional documentation and the firm's financial capacity.