Norwegian Financial Supervisory Authority closes audit inspection of Kallesten Revisjon og Regnskap after flagging weaknesses in engagement acceptance documentation

The Norwegian Financial Supervisory Authority (Finanstilsynet) published an inspection report on Kallesten Revisjon og Regnskap AS, identifying weaknesses in the audit firm’s procedures for accepting new audit engagements and documenting related work. After reviewing the firm’s explanations and remediation, Finanstilsynet decided to close the supervisory case. The inspection followed media coverage earlier in the year concerning the firm’s audit engagement for a law firm (entity A), including that a part-time employee at the audit firm had a relationship to entity A. Finanstilsynet reviewed both general documentation on the firm’s quality management and compliance with the risk management regulation and anti-money laundering rules, and engagement-specific documentation on acceptance, customer due diligence, resignation and communications; it also held a follow-up meeting on 24 September 2024. Entity A approached the audit firm on 1 December 2023, and the acceptance assessment was completed on 7 December 2023 with effect from 1 January 2024. The firm reported that it has implemented a new system to ensure timely and complete documentation for acceptance of all new audit engagements and updated its routines for internal assessment of independence threats and conflicts of interest before accepting new engagements. Finanstilsynet noted the firm’s account that the part-time employee’s role was limited and that the relationship to entity A was private; the employee left the firm on 1 July 2024. The authority indicated the case could be reopened if new information emerges later.