Financial reporting enforcement
Published: 21 February 2024
In 2023, Finanstilsynet gave priority to following up how companies report on the consequences of climate-related matters, Russia's invasion of Ukraine and macroeconomic challenges. Finanstilsynet's financial reporting enforcement revealed a number of material weaknesses in companies' financial reporting.
Facts about financial reporting
Finanstilsynet oversees issuers of transferable securities with Norway as their home state that have been admitted to, or for which admission to listing has been requested on a regulated market in the EEA. The review covers financial reporting and sustainability reporting.
At year-end 2023, 290 companies were subject to financial reporting enforcement. Of these, 39 were foreign. 213 were issuers of shares or equity certificates. 59 issuers of shares or equity certificates also issued bonds that were listed on Oslo Børs. At year-end 2023, 77 issuers had only bonds listed on Oslo Børs. During the year, six issuers of shares were listed on Oslo Børs, while five issuers were delisted.
Financial reporting enforcement in 2023
In 2023, Finanstilsynet gave priority to following up how companies report on the consequences of climate-related matters, Russia's invasion of Ukraine and macroeconomic challenges. As in previous years, Finanstilsynet also reviewed the financial reporting of selected financial institutions listed on a regulated market. Owing to prevailing market conditions, valuations of and information related to commercial real estate were relevant areas for review.
The selection of entities for review was based on signals received or risk assessments. Risk-based analyses rely partially on data reported by companies via the Altinn internet portal. The time that has passed since the company was last reviewed is also taken into account when selecting companies.
Review activities
In 2023, Finanstilsynet reviewed all or parts of the financial reporting of 26 entities. Particular attention was focused on issuers of shares and equity certificates, but also on some bond issuers. 13 companies were subject to closer monitoring. Five of these cases have yet to be finalised. In addition, ten cases from previous years were brought to completion.
All inspection reports have been published on Finanstilsynet's website.
Follow-up of information on expected credit losses
Accounting for expected credit losses in financial institutions and related disclosures (IFRS 9 and IFRS 7) were given priority when reviewing annual financial statements for 2021 and 2022. In 2023, Finanstilsynet completed several reviews on these topics, inter alia for savings banks and covered bond issuers.
Other administrative matters
Finanstilsynet issued administrative fines to two companies in 2023 for late publication of annual financial reports.
In August 2023, Finanstilsynet published an overview of deficiencies in listed companies’ annual financial reports for 2022 and, in October 2023, an overview of deficiencies in listed companies’ half-yearly reports. There were deficiencies in several companies’ reports related to their statement of responsibility and corporate responsibility statement. In addition, the annual financial reports for 2022 revealed several errors in relation to the requirements for the European Single Electronic Format (ESEF).
Finanstilsynet observes that the number of companies with deficiencies in their annual and half-yearly financial reports for 2022 and the first half of 2023 was fairly stable compared with the preceding period.