The Financial Supervisory Authority of Norway has decided to revoke the authorisation of a state-authorised auditor after finding gross and pervasive breaches of audit requirements across multiple engagements. The decision cites a recurring failure to obtain sufficient and appropriate audit evidence and the issuance of audit confirmations without an adequate basis, with reviews repeatedly relying on management statements without corroboration. The supervisory report points to systemic documentation weaknesses and a lack of professional scepticism, including missing or non-verifiable records of meetings and audit work and uncertainty about when parts of the documentation were created. In an engagement for a law firm, the auditor provided a 2022 confirmation to a bank regarding transfers of NOK 2 million to NOK 4 million between private funds and a client account without obtaining supporting documentation or assessing compliance with client-account rules, fraud risk, or potential tax motives, and the confirmation was found to be misleading. The auditor also attested annually, including in 2025, to the firm’s client money controls for reporting to the Lawyer Supervisory Authority despite limited procedures and insufficient documentation, including not addressing that client ledgers were kept in Excel. Two additional 2024 audits showed major shortcomings in revenue and project accounting work, including inadequate understanding of businesses and internal controls, failure to obtain contracts or substantively test key assumptions, limited follow-up of identified bookkeeping weaknesses, and failure to formally communicate matters to boards. The case followed a report received in July 2025 from the Lawyer Supervisory Authority and an inspection notice issued in January 2026. Finanstilsynet proceeded to complete the supervisory case before taking a view on the auditor’s request, submitted the same day, to deposit the authorisation.
Norwegian Finanstilsynet 2026-04-22
The Financial Supervisory Authority of Norway revokes a state-authorised auditor’s authorisation for gross audit law breaches
The Financial Supervisory Authority of Norway has revoked the authorisation of a state-authorised auditor after identifying gross, pervasive breaches of audit requirements, including recurring failures to obtain sufficient evidence and issuing confirmations without adequate basis. The supervisory report highlights systemic documentation weaknesses, lack of professional scepticism, misleading confirmations in a law firm engagement involving NOK 2–4 million transfers, inadequate work on client money controls, and major shortcomings in 2024 audits of revenue and project accounting.