Den norske Revisorforening
Revisorforeningen
The Norwegian Institute of Public Accountants is the professional body for registered public accountants and state authorised public accountants in Norway.
ID: 30557754667-93
Lobbying Activity
Response to Strengthening the quality of corporate reporting and its enforcement
4 Feb 2022
The corporate reporting ecosystem
Revisorforeningen - the Norwegian Institute of Public Accountants – fully support a review of the whole ecosystem supporting high quality corporate reporting by public interest entities. The three pillars – corporate governance, audit and supervision – are interdependent, and it is necessary to take all three pillars into account when assessing the effectiveness of the corporate reporting environment.
We support an approach that fully acknowledges the need for trust in the quality of corporate reporting, evidence-based measures and proportionate action. In an already highly regulated environment, we need better regulation and not more regulation.
Joint audit
Revisorforeningen do not believe that mandatory joint audit for public interest entities will benefit either the audit market or audit quality. In our view, joint audit could have adverse consequence on efficient performance of quality audits and could result in unclarity with regards to the auditors’ responsibilities. Experience has shown that mandatory joint audit of PIEs does not lead to “two-tier” audit firms moving into the PIE market. Rather, there is a danger that joint audit could lead to less, rather than more, auditor choice, as independence prohibit audit firms which have recently provided other service to the PIE from taking on the audit engagement.
Revisorforeningen does not support the introduction or incentivisation of mandatory joint audit for public interest entities.
Fee cap
Presently, assurance opinions issued under national and international assurance standards are categorized as non-audit services in the fee cap calculation. However, issuing audit and assurance opinions is in some cases nationally regulated to be done by the statutory auditor and is in the core purpose of auditors. This is the opposite to non-audit services. In our view, all assurance opinions issued by the auditor of a PIE should be categorized as audit services, in line with the reality and purpose of these engagements. This is particularly important as sustainability reporting is becoming an integral part of corporate reporting with the same need for assurance as the financial reporting. The fees for assurance engagements should be included in the denominator, and not in the numerator, of the fee cap calculation in the EU Audit Regulation.
Small public interest entities
There are many public interest entities which are relatively small in relation to the current total PIE-requirements in EU legislation. Currently, there exists a few exemptions in the regulation for smaller PIEs, but we believe that the current regulation is not proportionate and that there is a need to look at further simplifications for this group.
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