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Norway

International Standards on Auditing

Summary
The International Monetary Fund's 2005 Financial Systems Stability Assessment on Norway noted that accounting, auditing, and actuarial standards were "well developed" and in line with international standards and best practices. According to the Norwegian Institute of Public Accountants' self-assessment prepared as part of International Federation of Accountants Member Body Compliance Program, International Standards on Auditing (ISAs) are adopted as Norwegian auditing standards (RSs) although with adaptations to reflect the local legal environment. Differences with the International Auditing and Assurance Board standards are described in the Preface to RSs. On May 17, 2006, Directive 2006/43/EC of the European Parliament and the Council came into force, requiring all statutory audits to be carried out on the basis of ISAs as adopted by the European Commission (EC). European Union member states shall adopt and publish the provisions necessary to comply with this Directive before June 29, 2008. Member states are allowed to impose additional requirements relating to the statutory audits of annual and consolidated accounts for periods expiring on June 29, 2010. Norway is a European Economic Area member and as such must adhere to the EC regulations.

    General Overview

    On May 17, 2006, Directive 2006/43/EC of the European Parliament and Council came into force, requiring all statutory audits of annual and consolidated accounts to be carried out on the basis of International Standards on Auditing (ISAs) as adopted by the European Commission (EC). The Directive aims at high, though not full, harmonization of statutory audit requirements. European Union (EU) member states shall adopt and publish the provisions necessary to comply with the Directive before June 29, 2008. According to the directive, member states should be allowed to impose additional national audit procedures or requirements only if those requirements have not been covered by the adopted ISAs. If, however, the adopted ISAs contain audit procedures which would lead to a specific legal conflict with national law, member states are allowed to carve out the conflicting part of the ISA. Member states may impose these additional requirements relating to the statuary audits of annual and consolidated accounts for periods expiring on June 29, 2010.
    The legal framework for auditing practices in Norway is mainly governed by the Act on Auditing and Auditors issued in 1999. The same set of auditing standards is applicable for listed and non-listed companies. According to the website of the Norwegian Institute of Public Accountants (DnR), the following entities are required to have their financial statements audited: (1) private and public limited companies; (2) branches of foreign companies with turnover more than Norwegian Krone (NOK) 5 million; (3) partnerships with turnover exceeding (NOK) 5 million or partnerships with more than five partners and limited partnerships if the general partner is a legal entity with limited liability; and (4) sole proprietors if their assets exceed NOK 20 million or with more than 20 employees. Norwegian national standards (Revisjonsstandard, or RS) are to be used in the audits of financial statements. According to the 2006 Norwegian Institute of Public Accountants self-assessment prepared as part of the International Federation of Accountants (IFAC) Member Body Compliance Program, "IAASB [International Auditing and Assurance Board] pronouncements are adopted as national standards and amended as necessary to address differences due to conflicts with legal or regulatory requirements" (p. 36).
    The regulatory responsibility for banks, insurance firms, and the securities market falls under the Financial Supervisory Authority of Norway (Kredittilsynet, or FSAN). The FSAN was established in 1986 as an integrated supervisor for these sectors. The FSAN's responsibilities include ensuring that auditors maintain their independence and are in compliance with laws, regulations, and good auditing practice. FSAN is the licensing authority for accountants and auditors. The DnR is the recognized standard-setting body in Norway, although its standard-setting responsibilities are not provided for in the legislation, as is explained in the 2006 DnR self-assessment. The DnR also develops the professional code of ethics for its members which, as the assessment further specifies, is based on the IFAC Code of Ethics issued prior to 2004. However, the DnR plans to incorporate the latest version of the IFAC Code (effective June 30, 2006) into the national requirements. The DnR is listed as a member on the IFAC website.


    The Principles

    ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Formål og generelle prinsipper for revisjon av regnskaper" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 200 resulting from the adoption by the IAASB of the Risk Standards. The amendments have been effective for periods starting on or after January 1, 2006. The self-assessment notes that the standard differs from ISA 200 in that it refers to "good auditor practice" instead of the IFAC Code of Ethics and to additional requirements of the Norwegian legislation. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 210 Terms of Audit Engagements (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Vilkår for revisjonsoppdrag" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 210 resulting from the adoption of the Risk Standards by the IAASB. The amendments have been effective for periods starting on or after January 1, 2006. The self-assessment notes that the there are no differences between Norwegian standard and ISA 210. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Kvalitetskontroll av revisjon av historisk økonomisk informasjon (revidert)" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 220 resulting from the adoption of the Risk Standards by the IAASB. The amendments have been effective for periods starting on or after January 1, 2006. The self-assessment notes that the standard differs from ISA 220 in that it refers to "good auditor practice" instead of the IFAC Code of Ethics and to additional requirements of the Norwegian legislation. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 230R Documentation (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Dokumentasjon" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 230 resulting from the adoption of the Risk Standards by the IAASB. The amendments have been effective for periods starting on or after January 1, 2006. However, the self-assessment notes that the subsequent amendments to ISA 230 have not been incorporated and there is no further publicly available information addressing Norway's compliance with this ISA.

    ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisors oppgaver med og plikter til å vurdere misligheterved revisjon av regnskaper" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 240 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that the amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Vurdering av lover og forskrifter ved revisjon av regnskaper" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 250 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that the amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Kommunikasjon om revisjonsmessige forhold til dem som har overordnet ansvar for styring og kontroll" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 300 Planning an Audit of Financial Statements (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Planlegging av revisjon av regnskaper (revidert)" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Forståelse av foretaket og dets omgivelser og vurdering av risikoene for vesentlig feilinformasjon" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 320 Audit Materiality (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Vesentlighet" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 320 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjonshandlinger for å håndtere anslått risiko" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjon i foretak som benytter serviceorganisasjoner" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 402 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 500 Audit Evidence (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjonsbevis" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjonsbevis - spesielle poster" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 501 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 505 External Confirmations (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Eksterne bekreftelser" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 510 Initial Engagements — Opening Balances (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Nye revisjonsoppdrag - inngående balanse" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 510 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 520 Analytical Procedures (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Analytiske kontrollhandlinger" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 520 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Stikkprøver og andre testmetoder i revisjon" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 530 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 540 Audit of Accounting Estimates (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjon av regnskapsestimater" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 540 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjon av målinger av og opplysninger om virkelig verdi" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 550 Related Parties (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Nærstående parter" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 550 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 560 Subsequent Events (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Hendelser etter balansedagen" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 560 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 570 Going Concern (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Fortsatt drift" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 570 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 580 Management Representations (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Uttalelser fra ledelsen" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 580 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 600 Using the Work of Another Auditor (effective)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Bruk av annen revisors" has been effective for periods ending on or after January 1, 1998. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 610 Considering the Work of Internal Auditing (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Vurdering av internrevisjonens arbeid" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 610 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 620 Using the Work of an Expert (effective 2005)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Bruk av en eksperts arbeid" was issued in May 1997 effective for periods ended on or after January 1, 1998. The standard was consequently amended to incorporate the changes to ISA 620 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisjonsberetningen" was effective for periods ended on or after December 31, 2001. The standard was consequently amended to incorporate the changes in Act on Auditing and Auditors. The amendments have been effective for periods starting on or after January 1, 2005. The self-assessment notes that changes had not been updated to IFAC's 2002 version and subsequent IAASB pronouncements had not been incorporated. There is no further publicly available information as to Norway's compliance with this ISA.

    ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

    There is insufficient information publicly available that directly addresses this principle.

    ISA 710 Comparatives (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Sammenlignbare opplysninger" was issued in January 2000. The standard was consequently amended to incorporate the changes to ISA 710 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2005. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Andre opplysninger I årsrapporten" was issued January 2000. The standard was consequently amended to incorporate the changes to ISA 720 resulting from the adoption of the Risk Standards by the IAASB. The assessment notes that amendments have been effective for periods starting on or after January 1, 2005. However, there is no further publicly available information as to Norway's compliance with this ISA.

    ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

    According to the 2006 DnR self-assessment, the corresponding Norwegian standard "Revisors uttalelser ved revisjonsoppdrag med spesielle formål" has been effective for periods starting on or after January 1, 2006. However, there is no further publicly available information as to Norway's compliance with this ISA.

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    Sources of Assessment

    International Monetary Fund, "Norway: Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision, Insurance Regulation, and Payment Systems," Country Report No. 05/200, Washington D.C.: IMF, June 14, 2005. Available from International Monetary Fund website. Accessed on November 12, 2007. (IMF 2005)

    Norwegian Institute of Public Accountants, "Assessment of the Regulatory and Standard-Setting Framework," Self-assessment prepared as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, April 2005. Available from International Federation of Accountants' website. Accessed on November 12, 2007. (DnR 2005)

    Norwegian Institute of Public Accountants, "Response to the IFAC Part 2, SMO Self-Assessment Questionnaire," Self-assessment prepared as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, August 2006. Available from International Federation of Accountants website. Accessed on November 12, 2007. (DnR 2006)

    Norwegian Institute of Public Accountants website. Accessed on November 12, 2007. (DnR website)

    Relevant Organizations

    Committee of European Securities Regulators (CESR)

    European Accounting Regulatory Committee (ARC)

    European Commission (EC)

    European Federation of Accountants - Fédération des Experts Comptables Européens (FEE)

    European Financial Reporting Advisory Group (EFRAG)

    Financial Supervisory Authority of Norway - Kredittilsynet (FSAN)

    Ministry of Finance - Finansdepartementet (MoF)

    Norges Bank (NB)

    Norwegian Accounting Standards Board - Norsk RegnskapsStiftelse (NASB)

    Norwegian Institute of Public Accountants - Den norske Revisorforening (DnR)

    Oslo Stock Exchange - Oslo Børs (OSE)



    Relevant Legislation/Regulation

    Auditing and Auditors Act No.2, 1999 - Lov om revisjon og revisorer No.2, 1999

    Regulations on Auditing and Auditors No. 712, 1999

    Accounting Act,1998 - lov om årsregnskap m.v., 1998 (in Norwegian only)

    Public Limited Companies Act, 1997 - Lov om allmennaksjeselskaper, 1997 (in Norwegian only)

    Act on Auditing and Auditors No.2, 1999 - Lov om revisjon og revisorer, 1999

    Private Companies Act, 1997 - Lov om aksjeselskaper, 1997 (in Norwegian only)

    Partnerships and Limited Liability Partnerships Act, 1985 - Lov om ansvarlige selskaper og kommandittselskaper, 1985 (in Norwegian only)

    Circulars of the OSE - Børssirkulære (in Norwegian only)

    Rules and Regulations of the OSE - Børsregler (in Norwegian only)

    Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on Statutory Audits of Annual Accounts and Consolidated Accounts, amending Council Directives 78/ 660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (EC 2006/43)

    EU Auditing -Related Directives



    Supplementary Sources

    Financial Supervisory Authority of Norway, "The Financial Market in Norway 2006: Risk Outlook," Oslo: Kredittilsynet, February 2007. Available from Financial Supervisory Authority of Norway website. Accessed on November 13, 2007. (FSAN 2007a)

    Financial Supervisory Authority of Norway, "Strategy 2006 - 2010," Oslo: Kredittilsynet, May 2007. Available from Financial Supervisory Authority of Norway website. Accessed on November 12, 2007. (FSAN 2007b)

    International Federation of Accountants website. Accessed on November 12, 2007. (IFAC website)
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