Auditing

Supervision

Auditors auditing public interest entities, i.e. companies that have issued securities on Oslo Børs (listed companies), banks, insurers and mortgage companies, shall, pursuant to the Auditors Act, be subject to periodic inspections at least every three years. These inspections are conducted by Finanstilsynet. Other auditors are to be subject to periodic reviews at least every six years. The Norwegian Institute of Public Accountants carries out these reviews of its members on behalf of Finanstilsynet. In addition, Finanstilsynet conducts risk-based supervision based on signals and reports to ensure that audit firms and audit performance are compliant with the Norwegian Auditors Act, including good auditing practices.

Summary of supervisory activity in 2023:

• Carried out inspections at three audit firms that audit public interest entities, including one conducted jointly with the Public Company Accounting Oversight Board (PCAOB) in the US.
• Carried out inspections at 21 audit firms based on risk-based selection.
• Initiated a thematic inspection at six audit firms on their compliance with the requirements laid down in the Auditing Regulation for an additional report to the audit committee, an auditors' report and ESEF reporting (European Single Electronic Format).
• Made one decision to revoke the authorisation of an audit firm, six decisions to revoke the authorisations of state authorised auditors, one decision on an administrative fine and one decision prohibiting a person to hold a management function, cf. the Auditors Act.
• Received reports from all audit firms that audit public interest entities on the performance of each audit engagement. The information is used in Finanstilsynet's follow-up of audit firms, as well as in statistics and information about the audit market.
• Developed a new Altinn form for reporting audit firms’ compliance with statutory requirements and quality management standards. The reporting will take place in early 2024.

Finanstilsynet prepares an annual report on the Norwegian audit market and a ‘Market Monitoring Report’ that is included in assessments at European level under the auspices of the Committee of European Oversight Bodies (CEAOB).

Authorisations

In 2023, 27 firms were authorised as audit firms and 1 049 persons were authorised as state authorised auditors.

There has been a significant increase in the number of people who have applied to be authorised as state authorised auditors. This is because the transitional period laid down in the Auditors Act expired on 31 December 2023. State authorised auditors are listed in the Register of Auditors. Under current law, those who were not authorised to undertake audit engagements prior to 31 December 2023 must apply for an auditor register number to remain on the register. Other authorisations will be in escrow, and the title state authorised auditor cannot be used. At year-end 2023, there were nearly 50 per cent more authorised auditors with an auditor register number than at the start of the year.

Regulatory development

Finanstilsynet participates in European and global supervisory cooperation through CEAOB and IFIAR (International Forum of Independent Audit Regulators). Through its participation in these organisations, Finanstilsynet was involved in preparing the response to the consultation on the international standard setting process in the field of auditing.