Den norske Revisorforening
Member | Established: 1930 | Member since 1977
DnR is a professional organization for registered and state authorized public accountants (statutory auditors) in Norway. Membership of the institute is voluntary and comprise most of the public accountants in the jurisdiction. The objectives of DnR are to raise the professional standards of its members, ensure that its members observe adopted ethical standards, represent its members' interests in relation to the authorities and to the general public, express opinions on professional matters, and promote the education of prospective auditors.
DnR is a member of the International Federation of Accountants, Accountancy Europe, and the Nordic Federation of Public Accountants.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
Since 1993, all members of DnR performing statutory audit and their audit firms have been subject to a mandatory quality review. In 2009, a statutory requirement on quality review for all firms of state authorized and registered public accountants was introduced.
Since 2010, the responsibility to establish and operate a quality assurance (QA) review system is mandated to the Financial Supervisory Authority of Norway (FSA) based on the Auditors Act.
FSA has appointed DnR to perform quality assurance reviews of its members who are statutory auditors and do not audit public interest entities at least every six years. It also closely cooperates with FSA by reporting the results of the reviews.
DnR reports that the QA reviews are conducted in accordance with SMO 1 and are performed by experienced members of the institute, practicing as statutory auditors. The quality assurance reviews include systems of quality control at the firm level and audit engagement and other assurance engagements. Engagements are chosen for review based on stakeholder interest and risk factors, combined with a degree of random selection.
The institute has also established an ongoing process of cooperation with FSA and meets with FSA representatives annually to collaborate on the topics for the yearly on-site thematic inspections. The institute also updates its members on a regular basis on news and changes affecting the QA reviews. In addition, DnR also provides training to its members on key issues identified during reviews of auditors and audit firms. Furthermore, DnR requires all QA inspectors to annually attend a technical training program. Feedback from QA reviews, including errors and mistakes found in audit firms, are published in annual reports by DnR and FSA and are conveyed to members through newsletters, magazine articles, continuing professional development courses and the major DnR member conferences.
SMO 2: International Education Standards
DnR focuses its efforts on the promotion and support of the adoption of IES and other IAESB pronouncements to the government, the Financial Supervisory Authority of Norway (FSA), and universities.
It is also actively involved in promoting best practices in the area of initial professional education. The institute reports that, since 2012, it has been partnering with major audit firms in Norway in order to work with educational institutions and policy makers responsible for developing education programs and curriculum that are relevant to the changing needs of the profession. DnR reports that is has established an ongoing process to inform universities and regional colleges of updates from the IAESB.
Additionally, DnR notes that it works to fully prepare prospective accountancy candidates by holding annual meetings with the universities to define requirements and necessary competencies of future professional accountants.
Furthermore, the institute also collaborates with the Financial Supervisory Authority and participates in the committee responsible for the Auditor’s Test of Practical Ability ("Eksamensutvalget for praksisprøven"), which auditor candidates must pass as part of their licensing and IPD requirement.
DnR also offers an extensive program of training courses and e-learning in order to support its members’ fulfillment of continuing professional development (CPD) requirements. The institute has also communicated that it has been actively promoting the adoption of the mandatory CPD requirement of a minimum of 120 hours of CPD over three years and has included this proposal in the revised Auditors Act that is expected to come into effect in 2020.
DnR has reviewed the 2015 revised IES and emphasis on learning-outcomes based approaches. DnR reports that initial professional development (IPD) learning-outcomes are secured through comprehensive descriptions in the university curriculums for the audit education and the FSA examination of professional competence. DnR further reports that the FSA monitors engagement partners through inspections and periodical quality control reviews to maintain professional competence in conducting statutory audits. Periodical quality control reviews of non-public-interest auditors, are performed by DnR on behalf of the FSA. The system ensures that achievement of the relevant learning outcomes is periodically demonstrated for all Engagement Partners.
DnR is encouraged to participate in the international standard-setting process by providing comments on IAESB Exposure Drafts, if deemed relevant.
SMO 3: International Standards on Auditing
Norwegian law only 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 DnR, which are the ISA, are being applied. DnR reports that the recognition of ISA as the applicable auditing standards 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 DnR assumed the responsibility for preparing Norwegian translations of ISA and decides on their effective date in the jurisdiction. The institute indicates it translates ISA on an ongoing basis and has translated the new and revised ISA (700-series) for implementation in the jurisdiction.
DnR reports that it also 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 webpages and newsletters.
In addition, “Descartes,” a web-based audit software which features an ISA-compliant methodology, is widely used by Norwegian small- and medium-sized practices (SMPs). The audit software integrates and operationalizes ISA in order for users to perform effective, high-quality audits. According to the institute, the Descartes software is used by more than 2,700 auditors across multiple countries.
DnR is encouraged to share an update on the status of implementation of the EU Audit Directive on the national Audit Law which is expected to be implemented in 2020.
SMO 4: Code of Ethics for Professional Accountants
The IESBA Code of Ethics is not adopted by law in the jurisdiction, however, the Audit Act includes detailed independence requirements which, according to the DnR, are as stringent as the independence requirements in the 2016 IESBA Code of Ethics. In addition, DnR has adopted a Code of Ethics for its members which covers other requirements of the IESBA Code.
The institute reports that together with the requirements in the Audit Act and other reporting obligations, the current ethical requirements are in all material respects in line with the requirements of the 2016 IESBA Code.
Additionally, DnR 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, DnR offers courses and e-learning training that focus on ethical requirements and ethical behavior. The DnR has also created an advisory service system where members can submit queries and receive advice on any concerns.
Given the possible changes to ethical requirements in the Norwegian audit legislation as part of the national implementation of the EU Audit Directive, DnR reports that it is assessing suitable ways to ensure continued alignment with the IESBA Code of Ethics for its members.
SMO 5: International Public Sector Accounting Standards
Although DnR has no direct responsibility for the adoption of 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. The DnR reports that the Ministry of Finance has progressed with the adoption of IPSAS. For example, beginning in 2016, the government permits agencies to voluntarily prepare accrual-based financial statements as supplementary information to the mandatory cash-based statements. The Ministry of Finance has also developed non-mandatory accrual-based public sector accounting standards which are based on IPSAS according to the DnR.
To further promote the full adoption and implementation of IPSAS, the institute states that it participates in public dialogues as well as seminars and meetings on accrual accounting. These are part of DnR’s ongoing efforts to identify opportunities to further assist the Norwegian government and promote harmonization with the international standards.
SMO 6: Investigation and Discipline
DnR reports that while it has no direct responsibility for the investigation and discipline (I&D) system in the jurisdiction, it closely cooperates with the Financial Supervisory Authority of Norway (FSA) to ensure effective enforcement of audit quality and statutory requirements.
DnR performs quality assurance reviews of its members who are statutory auditors and do not audit public interest entities. The institute maintains an ongoing process to report non-complying auditors 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.
During the 2017 SMO Action Plan update process, DnR conducted a self-assessment of the I&D system against the SMO 6 requirements and reports that the I&D system is in line with the requirements.
SMO 7: International Financial Reporting Standards
DnR has no direct responsibility for the adoption of corporate accounting standards, however, the institute reports that it uses its best endeavors to support the use of IFRS—which are adopted by law—and promote the adoption of IFRS for SMEs in Norway.
As of the time of the assessment, the adoption of IFRS for Small- and Medium-sized Entities (SMEs) is under consideration. In September 2015, the Norwegian Ministry of Finance issued an exposure draft of a new Norwegian Accounting Act for public consultation. As per Q2 2018 these proposals are still under consideration by the Ministry. DnR indicates it is actively supporting the adoption of IFRS for SMEs as the basis for Norwegian accounting standards and provides technical support to the Norwegian Accounting Standards Board (NASB) to promote their adoption.
To support its members, DnR 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 DnR’s collaboration with NASB and Accountancy Europe.
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