The Norwegian Financial Supervisory Authority (Finanstilsynet) has published an inspection report on Figuras AS, finding non-compliance with applicable law and auditing standards in the firm’s acceptance of an audit engagement, the performance of the audit, and the timing and documentation of its assessment of whether to resign from the engagement. Finanstilsynet took note of the firm’s description of changes to routines intended to prevent a recurrence. The report highlights an undocumented independence assessment prior to acceptance, which Finanstilsynet viewed as particularly serious given a connection between the engagement partner and the audited entity’s principal shareholder via a shared 35% ownership interest in another company. Finanstilsynet also concluded that the acceptance assessment was grossly deficient for not sufficiently addressing issues raised by the previous auditor, including material going concern uncertainty, loss of share capital and strong indications of insolvency, and for not following Finanstilsynet guidance on acceptance and continuation of audit engagements. Further shortcomings were identified in the audit work, including inadequate fraud risk assessment where fees were paid to related parties without supporting agreements, and insufficient work on whether management had fulfilled its statutory duty to act when equity was threatened. On continuation and resignation, Finanstilsynet found that the firm’s follow-up of matters raised in an April 2024 numbered letter was inadequate, that the continuation assessment was documented too late, and that the auditor resigned too late, with resignation taking effect on 31 October 2024. Figuras AS has described revised routines to address the findings, and Finanstilsynet stated it has taken this explanation into account.
Norwegian Finanstilsynet 2025-02-07
Norwegian Financial Supervisory Authority finds serious audit acceptance, independence and withdrawal failings at Figuras AS and notes remedial procedural changes
The Norwegian Financial Supervisory Authority (Finanstilsynet) published an inspection report on Figuras AS, identifying non-compliance with laws and auditing standards in audit engagement acceptance, performance, and resignation timing. Key issues included an undocumented independence assessment, inadequate fraud risk assessment, and delayed resignation. Figuras AS has outlined revised routines to prevent recurrence, which Finanstilsynet acknowledged.