Do I need an auditor?

All enterprises that are obliged to submit audited annual accounts must have a public accountant. Whether or not you are subject to the audit obligation will partly depend on your organisational form and the size of the enterprise. Some sectors are subject to the audit obligation through specific rules. Lawyers, accountants and estate agents are examples of this.


An audit is a review of accounts to check they are in order. If the enterprise is subject to the audit obligation, you must ask an approved audit firm or a registered or state-authorised auditor to perform this audit. After completing the audit, the auditor must prepare an audit report which must be submitted along with the annual accounts to the Register of Company Accounts. Any remarks which the auditor wishes to make must be stated in this audit report.

Revisorloven om revisjonsplikt (in Norwegian only)

The auditor must not have any links with the enterprise other than being its auditor. The Auditor Act imposes strict requirements on independence. For example, if you have a brother who is an auditor, he will not be able to act as auditor for your enterprise.

Finanstilsynet's registry

Revisorloven om revisors opplysningsplikt (in Norwegian only)

Private limited companies (AS)

Small limited companies are normally not required to have an auditor. These companies can choose not to have their annual accounts audited. This is called "opting out of audit".

Private limited companies cannot normally opt out of auditing if:

  • Operating revenues amount to less than NOK 6 million, and
  • Balance sheets assets amount to less than NOK 23 million, and
  • Average number of employees is less than 10 full-time equivalents.

Opting out of auditing by existing limited companies

If a private limited company is considering opting out of audits, the previous annual accounts will be used as a basis for the assessment. If the annual accounts show that the limited company is below the thresholds, the general meeting may decide that the annual accounts need not be audited, and that the company can terminate the auditor's assignment. Opting out of auditing must be reported using the "Coordinated register notification" form in Altinn, and will be valid once it has been registered in the Register of Business Enterprises.

Opting out of auditing by new limited companies

If no auditor is appointed in the memorandum of association, the annual accounts are not to be audited. In these cases, the new company is considered to have opted out of audits.

Aksjeloven om fravalg av revisjon (in Norwegian only)

The Brønnøysund Register Centre on opting out of audit (in Norwegian only)

 

Parent companies in groups

Private limited companies which are a parent company in a group can opt not to have their annual accounts audited when the conditions are met for the group viewed as a single entity.

In order to be considered a parent company, you must have a controlling influence in another company, either as the owner of shares or holdings or through an agreement.

Aksjeloven - definisjon av konsern (in Norwegian only)

Sole proprietorships

Small sole proprietorships are not normally subject to the audit obligation. The audit obligation will be triggered when the turnover exceeds NOK 5 million during the previous financial year and one of the following conditions is also met:

  • The balance sheet contains assets worth over NOK 20 million, or
  • Average number of employees is less than 20 full-time equivalents

General partnerships (ANS/DA)

Small general partnerships are not normally subject to the audit obligation.

General partnerships are subject to the audit obligation under the following conditions:

  • Operating revenues amount to NOK 5 million or more, or
  • The number of partners exceeds 5, or
  • If all partners are legal persons and have assets on the balance sheet worth over NOK 20 million or the average number of employees exceeds 10 full-time equivalents.

Co-operatives

Co-operatives become subject to the audit obligation when their operating revenues during the previous year amount to NOK 5 million or more.

Norwegian branches of foreign companies (NUF)

NUFs which are liable to pay taxes to Norway will be subject to the audit obligation when their operating revenues during the previous financial year exceeded NOK 5 million.

When is the audit obligation triggered and when does it lapse?

When the thresholds are passed and the enterprise becomes subject to the audit obligation, the obligation will be triggered during the next financial year.

A limited company which is subject to the audit obligation can opt out of auditing during the year after the threshold values fall below the limits.

The operating revenues of a sole proprietorship, general partnership, cooperative or NUF must be below the threshold for two consecutive years before the audit obligation lapses with effect from the third financial year onwards.

Revisorloven om revisjonsplikt og adgangen til å si opp revisor (in Norwegian only)

Aksjeloven om unntak fra revisjonsplikten (in Norwegian only)

Example:

Private limited companies

Eksempelbedriften AS was established in 2015. The company has revenues of less than NOK 6 million during its early years, and otherwise satisfies the requirements for opting out of audits. The company has decided to exercise this option and has opted out of having audits of its annual accounts.
In 2017, it wins an unusually large contract and its revenues amount to NOK 7 million during this year. This means that it will be subject to the audit obligation for the following year, i.e. 2018.

In 2018, the company's turnover is NOK 4 million, but it must still have its accounts audited as it passed the threshold amount in the previous year.

In 2019, it again opts out of having audits because its revenues in 2018 were below the threshold.

Co-operatives

Fellesblomster SA was established in 2015. During its first year, the co-operative recorded income of NOK 3.5 million. The threshold for the audit obligation is NOK 5 million, and the co-operative therefore did not need to be audited.

In 2016, they receive a large order and their income increases to NOK 5.5 million. The threshold for the audit obligation is exceeded. This means that the co-operative will be subject to the audit obligation in the following year (2017).

In 2017, the co-operative's income falls to NOK 4.5 million. Despite this, the co-operative has to arrange for its accounts to be audited in both 2017 and 2018, because they must be under the threshold for two consecutive years before the audit obligation will lapse. If the cooperative also has income of less than NOK 5 million in 2018, the audit obligation will lapse with effect from 2019.

Special certification

Note that even if the enterprise is not obliged to have its annual accounts audited, certain events can trigger a requirement to obtain special certification from an auditor.

For example, the Companies Act requires an auditor to confirm the invested capital in a private limited company if the share contribution is made in the form of non-cash assets. This applies both to the foundation of the limited company and any subsequent increase in capital.

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