Den Norske Revisorforening

Before the European Union's Audit Directive No. 2014/56/EU transposition, the Revisorforeningen carried out the QA reviews of all statutory auditors in the jurisdiction. Now the Financial Supervisory Authority of Norway (FSA) is responsible for quality assurance (QA) reviews for public interest entities (PIEs), and the Revisorforeningen conducts QA reviews for non-PIEs, under the supervision of the FSA. The Revisorforeningen reports that the QA system is aligned with SMO 1 best practices.

Revisorforeningen reports that the QA reviews are performed by experienced institute members practicing as statutory auditors. The quality assurance reviews include quality management systems at the firm level, audit engagement, and other assurance engagements. Engagements are reviewed based on stakeholder interest and risk factors, combined with a degree of random selection. Results and insights from QA reviews are published in annual reports by Revisorforeningen and FSA and conveyed to members through newsletters, magazine articles, CPD courses, and conferences.

The Revisorforeningen has established an ongoing cooperation process with FSA and meets with FSA representatives annually to collaborate on the topics for the yearly on-site thematic inspections. The Revisorforeningen also updates its members regularly on news and changes affecting the QA reviews. In addition, Revisorforeningen provides training to its members on critical issues identified during inspections of auditors and audit firms. Furthermore, Revisorforeningen requires all QA inspectors to attend a technical training program annually.

In 2021, Revisorforeningen released guidance material intended for SMPs on implementing ISQM 1 and 2. The guidance is tailored for SMPs in Norway as a supplement to the guidance from the IAASB.

The Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 1 “Quality Assurance" obligations and is committed to continuous improvement.

Current Status: Sustain

In Norway, the national legislation regulates the initial and continuing professional development (IPD and CPD, respectively) requirements for State Authorized Public Accountants (SPA). Several institutions are engaged in the implementation of IPD and CPD requirements, such as the Norwegian Ministry of Education and Research, the Ministry of Finance, the Financial Supervisory Authority of Norway (FSA), the Norwegian Institute of Public Accountants (Revisorforeningen), and universities. The FSA regulates the public accountants (statutory auditors) at the state level. The universities and business schools provide initial professional education in auditing and accounting.

Revisorforeningen focuses on promoting and supporting the adoption of IES and other pronouncements to the government, the Financial Supervisory Authority of Norway (FSA), and universities. The Revisorforeningen reports that the requirements for SPA comply with the latest IES.

Revisorforeningen is involved in promoting best practices in initial professional education. The institute reports that, since 2012, it has been partnering with major audit firms in Norway to work with educational institutions and policymakers responsible for developing educational programs and curricula relevant to the profession's changing needs. Additionally, Revisorforeningen notes that it holds annual meetings with the universities to define future professional accountants' requirements and necessary competencies.

The Revisorforeningen also collaborates with the FSA and participates in the Committee responsible for the Auditor's Test of Practical Ability, which auditor candidates must pass as part of their licensing and IPD requirement. The FSA and the institute monitor engagement partners through inspections and periodic QA reviews to ensure professional competence in conducting statutory audits. The system certifies that relevant learning outcomes are achieved periodically for all engagement partners.

Revisorforeningen also offers an extensive program of training courses and e-learning to support its members' fulfillment of CPD requirements.

In 2023 the Revisorforeningen reports that the demand for and importance of sustainability reporting and assurance is growing fast in the Norwegian and European markets. These significant developments create a need for developing the necessary skills and knowledge. The Revisorforeningen, in cooperation with the five largest audit firms in Norway, established a Corporate Sustainability Reporting Academy. The Academy provides seven days of intensive training in the European Sustainability Reporting Standards (ESRS) and assurance on sustainability reporting. The first cohort completed the Academy in November 2022.

The Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 2 “International Education Standards for Professional Accountants and Other Pronouncements” obligations and is committed to continuous improvement.

Current Status: Sustain

Norwegian law refers to generally accepted auditing and assurance practices and does not specify auditing standards. However, de facto, the standards issued by the Auditing Standards Committee of the Revisorforeningen, which are the ISA, are being applied. Revisorforeningen reports that the recognition of ISA as the applicable auditing standard is demonstrable through consistent application amongst auditors and consistent enforcement by the audit oversight authority, the Financial Supervisory Authority of Norway, and legal courts.

The Revisorforeningen reports that the 2021 IAASB Handbook requirements have been adopted to date and the institute has assumed the responsibility for preparing Norwegian translations of ISA. Revisorforeningen reports that it has an ongoing process to review IAASB pronouncements and to provide comments on exposure drafts. The institute disseminates information on the exposure drafts on its web pages and newsletters.

In 2022, Revisorforeningen conducted extensive training and guidance to help members implement new and revised standards. This includes new statutory requirements on quality management and ISQM 1 and 2 requirements.

In addition, "Descartes," a web-based audit software that features an ISA-compliant methodology, is widely used by Norwegian small- and medium-sized practices (SMPs). The audit software integrates and operationalizes ISA for users to perform effective, high-quality audits. According to the institute, over 2,700 auditors use the Descartes software across multiple countries.

Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 3 “International Standards and Other Pronouncements Issued by the IAASB” obligations and is committed to continuous improvement.

Current Status: Sustain

In Norway, the Auditors Act of 2020 mandates all statutory auditors and audit firms to be subject to principles of professional ethics. The Auditors Act includes independence requirements in line with the EU Audit Directive and other provisions related to the auditor's role, engagement partner, professional confidentiality, and acceptance and resignation. As reported by the Revisorforeningen, these requirements are as stringent as and align with the 2022 International Code of Ethics issued by the IESBA.

Revisorforeningen has established an ongoing process to monitor new and amended IESBA pronouncements and disseminates information to its members through its website and e-mail newsletters. The institute reports that it reviews and provides comments on IESBA exposure drafts as needed.

As part of the institute's continuing professional development program, Revisorforeningen offers courses and e-learning training that focus on ethical requirements and ethical behavior. The Revisorforeningen has also created an advisory service system where members can submit queries and receive advice related to ethical concerns.

Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 4 “IESBA Code of Ethics for Professional Accountants” obligations and is committed to continuous improvement.

Current Status: Sustain

The Ministry of Finance (MoF) is responsible for setting public sector accounting standards in Norway. Public sector entities are using national standards on a cash-basis.

Although Revisorforeningen has no direct responsibility for adopting public sector accounting standards in the jurisdiction, it indicates that it uses its best endeavors to promote the adoption of IPSAS to the government of Norway. Revisorforeningen reports that the Ministry of Finance permits agencies to voluntarily prepare accrual-basis financial statements using standards based on IPSAS as supplementary information to the mandatory cash-based statements.

To further promote the mandatory adoption and implementation of IPSAS, Revisorforeningen participates in public dialogues, seminars, and meetings on accrual accounting. These are part of Revisorforeningen’s ongoing efforts to identify opportunities to assist the Norwegian government and promote harmonization with international standards.

Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 5 “International Public Sector Accounting Standards and Other Pronouncements Issued by the IPSASB” obligations and is committed to continuous improvement.

Current Status: Sustain

In Norway, the Financial Supervisory Authority of Norway (FSA) has the authority to establish an investigative and disciplinary (I&D) system for statutory auditors. Accordingly, the FSA has implemented an I&D system that is aligned with the best practices of SMO 6.

The Revisorforeningen reports that while it has no direct authority in this area, it closely cooperates with the FSA to ensure effective enforcement of audit quality and statutory requirements. Revisorforeningen performs quality assurance reviews of its members and statutory auditors that audit non-public interest entities. Revisorforeningen maintains an ongoing process to report non-compliance to the FSA, particularly in cases of suspected non-compliance with professional standards and when the withdrawal of the auditor’s license should be considered and investigated accordingly.

Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 6 “Investigation and Discipline” obligations and is committed to continuous improvement.

Current Status: Sustain

Norway has adopted the European IAS Regulation that defines public interest entities as listed companies, credit institutions, and insurance undertakings. Norwegian listed companies prepare consolidated accounts according to IFRS while banks, insurance undertakings and other credit institutions must prepare consolidated and individual accounts according to IFRS (some adaptations apply to the individual accounts). All other companies in Norway have the option to apply IFRS and if not using IFRS, companies must use the Norwegian Generally Accepted Accounting Principles.

The Revisorforeningen is a founding member of the Norwegian Accounting Standards Board (NASB), an independent standard setter that sets the Norwegian Generally Accepted Accounting Principles. Revisorforeningen has representatives on the board and technical committees. Revisorforeningen reports that it monitors and reviews changes to EU legislation and promotes the necessary adjustments to the national legislation.

The Revisorforeningen has been participating in public consultations on accounting standards for Small-and Medium-Sized Enterprises since 2015. Revisorforeningen actively supports the adoption of IFRS for SMEs nationally and provides technical support to the NASB on this topic.

To support its members, Revisorforeningen provides training on IFRS and publishes relevant guidance on its website and through the dissemination of newsletters. The institute also contributes to exposure drafts issued by the IASB through Revisorforeningen’s collaboration with NASB and Accountancy Europe.

Revisorforeningen has demonstrated an ongoing process to maintain its fulfillment of the SMO 7 “International Financial Reporting Standards and Other Pronouncements Issued by the IASB” obligations and is committed to continuous improvement.

Current Status: Sustain