Auditing regulation and the statutory auditor's responsibilities in Norway

Abstract

The first part of the paper gives an overview of the historic development and current auditing regulation in Norway. Although auditing is regulated by legislation, the government has relied on the profession's self-regulation, especially in matters related to the conduct of an audit. In most cases, the Norwegian regulation arrangements and the statutory auditor's responsibilities bear resemblances to those found in other countries, especially the other Nordic countries. The second part of the paper illustrates how government regulation and the profession's self-regulation have affected the auditor's responsibilities related to (1) stewardship verifications (i.e., verification of management's managing and control of the firm's financial affairs), and (2) the mandatory control of the auditee's tax obligations. Both these requirements have raised fundamental questions about the statutory auditor's responsibilities beyond the verification of the annual accounts, and may reflect distinct conceptions of the role of a statutory auditor in Norway. This study shows that it is not evident that the Norwegian auditor's responsibility for stewardship verifications has resulted in professional practice significantly different from common international practice. However, the Norwegian statutory auditor's responsibility for control of the auditee's tax obligations goes beyond the requirements in other countries.