Brexit – legal consequences for audit firms

1. Authorisation of Norwegian audit firms
Authorisation of Norwegian audit firms requires that the majority of both the members and deputy members on the board, as well as holders of the majority of the votes in the firm's supreme governing body, are authorised as auditors/audit firms in Norway or another EEA country. UK auditors/audit firms will not meet this requirement. The firm is also required to have permanent office premises in Norway or another EEA country. Consequently, the firm cannot have permanent office premises in the UK.

2. Authorisation of foreign audit firms
Under the Auditors Act, only foreign audit firms from EEA countries can be authorised. Consequently, UK audit firms cannot be authorised in Norway.

3. Authorisation of Norwegian auditors and statutory auditors
Norwegian auditors authorised pursuant to the Auditors Act may have practical training from an EEA country. Practical training that has taken place after the date of a no-deal Brexit does not qualify.

Statutory auditors must be resident in an EEA country. Auditors who are resident in the UK thus cannot be statutory auditors in Norway.

The statutory auditor shall have the necessary security for possible liability. The security shall be provided by an entity from an EEA country. Until further notice, Finanstilsynet will accept security provided by entities in the UK.

4. Authorisation of auditors from other countries
Auditors from countries other than Norway may be authorised on the basis of auditor authorisations from another EEA country. Authorisation in Norway on the basis of an auditor authorisation in a third country requires that Norway has entered into an agreement for mutual recognition of auditors. Norway currently has no such agreement with the UK. Applicants with auditor authorisations from the UK must therefore meet the authorisation requirements of the Auditors Act, including requirements for Norwegian auditor education and practical training from an EU country.

5. Performance of audit procedures on a temporary basis
Auditors who are lawfully established in another EEA country may temporarily perform audit procedures in Norway on certain conditions. Audit business in the UK cannot form the basis for such temporary activities.

6. Registration of third-country audit entities
UK auditors/audit firms that audit third-country clients listed on Norwegian regulated markets must be registered in the Norwegian register of third-country audit entities. Until the European Commission has assessed the UK as equivalent or decided that there should be a transitional arrangement for the UK, form B must be used to apply for such registration.

• Register of third-country audit entities

7. Auditing of consolidated accounts
In connection with the statutory auditing of consolidated accounts for enterprises in the EEA that have subsidiaries in the UK, the UK auditor/audit firm for the subsidiary will be a third-country auditor.

8. Definition of public interest entities (PIE)
An entity that has issued only transferable securities for trading on a regulated market in the UK, and not in other EEA countries, will not be a public interest entity.

9. Exchange of information
Under current law, a Norwegian auditor/audit firm may transfer working papers or other documents to the supervisory authority of another EEA country on certain conditions. Such transfer of documents to the UK will no longer be possible without a special agreement between Finanstilsynet and the UK financial supervisory authority. There is no such agreement at the present time.