The Financial Supervisory Authority of Norway has issued a decision withdrawing the approval of a state-authorised auditor after an inspection found gross breaches of the rules governing audit firms and the performance of statutory audits, including failures to obtain sufficient and appropriate audit evidence for multiple financial statement items. The withdrawal is based on the Authority’s assessment that the breaches are so serious that the auditor is unfit, under the Auditor Act. The inspection (12–16 May 2025) covered the firm’s quality management arrangements and four selected audit engagements (one relating to the 2023 audit and three relating to the 2024 audit). Key findings included a lack of documented assessment of independence threats involving the firm’s quality reviewer and the fact that the monitoring control described in the firm’s quality management documentation was not carried out. Across the engagements, the Authority identified inadequate understanding and documentation of the audited entities and internal controls, insufficient and non-tailored risk assessments, weakly justified materiality determinations, and inadequate or undocumented procedures and audit evidence for revenues, cost of sales and other operating expenses, including one engagement where the auditor confirmed no work was performed on revenues. In one engagement, work on going concern was not documented and included an outdated statement despite the client having negative equity. The decision enters into force on 31 December 2025. From that date, the individual may no longer use the title “state-authorised auditor”, may not operate audit business as a sole proprietor, and may not act as engagement partner or be responsible for quality management in an audit firm, but may work as an employee in such a firm. The decision can be appealed within three weeks of receipt to the Finanstilsynsklagenemnda via the Authority, and a request for deferred implementation may be submitted.
Norwegian Finanstilsynet 2025-09-05
Financial Supervisory Authority of Norway revokes a state-authorised auditor’s approval effective 31 December 2025
Norway's Financial Supervisory Authority withdrew a state-authorised auditor's approval for gross audit rule breaches, including inadequate evidence and documentation. Failures in quality management and audit engagements led to the auditor being deemed unfit under the Auditor Act. Effective 31 December 2025, the decision restricts the auditor from using the title and operating independently, though employment in an audit firm is permitted.