Action Plan Developed by Den norske Revisorforening (DnR) BACKGROUND NOTE ON ACTION PLANS

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1 BACKGROUND NOTE ON ACTION PLANS Action Plans are developed by IFAC members and associates to address policy matters identified through their responses to the IFAC Compliance Self-Assessment Questionnaires. These action plans form part of a continuous process within the IFAC Member Body Compliance Program to support the ongoing development and improvement of the accountancy profession around the world. Action Plans are prepared by members and associates for their own use based on the national frameworks, priorities, processes and challenges specific to each jurisdiction. These plans will vary in their objectives, content and level of detail, consistent with their differing national environments and stages of development, and will be subject to periodic review and update. Refer to the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaire and Part 2 SMO Self- Assessment Questionnaire for background information on each member and associate, their environment and existing processes. These responses may be viewed at the Compliance Program website. Use of Information Please refer to the Disclaimer published on the Compliance Program website. ACTION PLAN IFAC Member: Original Publish : December 2010 Last Updated: March 2012 Next Update: March 2013 Status as of of Publication Page 1 of 14

2 GLOSSARY CEO Chief Executive Officer CPD Continuing Professional Development CPE Continuing Professional Education DnR Den norske Revisorforening (The Norwegian Institute of Public Accountants) EEA European Economic Area EU European Union EY Ernst & Young GAAP Generally Accepted Accounting Principles IAASB International Auditing and Assurance Standards Board IAESB International Accounting Education Standards Board IASB International Accounting Standards Board IES International Education Standards IESBA International Ethics Standards Board for Accountants IFAC International Federation of Accountants IFRS International Financial Reporting Standards IPSAS International Public Sector Accounting Standards IPSASB International Public Sector Accounting Standards Board ISA International Standards on Auditing ISQC 1 International Standard on Quality Control 1 PwC PricewaterhouseCoopers QA Quality Assurance Status as of of Publication Page 2 of 14

3 Action Plan Subject: Action Plan Objective: SMO 1 - Quality Assurance (QA) Maintain an Efficient and Effective Quality Control Program in Cooperation with the Financial Supervisory Authority of Norway # Start Actions Completion Background: Responsibility From 2010 was appointed by the Financial Supervisory Authority of Norway, which is the public body authorizing and supervising the work of statutory auditors in Norway, to carry out the quality control program covering all statutory auditor members of DnR. In 2011 procedures were changed so that the control of the work of firms auditing clients of public interest is performed by employees of the Financial Supervisory Authority of Norway. The quality control of the audit work of other practitioners is performed by experienced members of DnR, practicing as statutory auditors. The Board of DnR has decided to expand the control to cover book-keeping services performed by members. This change will be in effect from the accounting year DnR will perform this control on behalf of the Financial Supervisory Authority of Norway. Information on Oversight in Norway Oversight in Norway is performed by the The Financial Supervisory Authority of Norway. For more information in Norwegian, please visit the website ( Disseminate Revisions to the Manual on Performing and Reporting on Quality Control 1. Meeting with all members appointed to perform Quality Control August controls and representatives of the Financial Committee, Supervisory Authority of Norway. Focus areas and Chief Executive recent developments. Officer (CEO) 2. Necessary updates of the Quality Control Program. DnR-Board, CEO Quality control Manager, DnR technical staff Quality control Manager Educate and Communicate Changes in the Revised Standards to Stakeholders 3. Manual for the quality control performed by DnR is updated annually and distributed to all members. Quality control Committee, CEO Quality control Manager Status as of of Publication Page 3 of 14

4 # Start Actions Completion Responsibility 4. Communicate changes in the Standards on DnR s CEO DnR technical staff web-site and in e-newsletters. Update Response to IFAC Compliance Self-Assessment Questionnaires SMO 1 5. Perform periodic review of DnR s responses to IFAC Compliance Self-Assessment Questionnaires and update sections relevant to this Statement of Membership Obligations (SMO) as necessary. CEO DnR technical staff Other 6. Q Expand DnR quality control to cover book-keeping services performed by members. Q CEO Quality control Manager Status as of of Publication Page 4 of 14

5 Action Plan Subject: Action Plan Objective: SMO 2 - International Education Standards (IESs) Communicate IES Requirements to the Stakeholders in Accounting Education # Start Actions Completion Background: Responsibility The Norwegian public accountants comprises two categories of auditors qualified to act as statutory auditors, "statsautorisert revisor" (state authorised public accountant) and "registrert revisor" (registered public accountant).both categories are licensed by the Financial Supervisory Authority of Norway and qualify to perform statutory audits of annual accounts. To be licensed as a statsautorisert revisor, the candidate must complete a master s degree in auditing and financial reporting (four years at university level). To be licensed as a registrert revisor, the candidate must complete a bachelor s degree in auditing and financial reporting (three years at university level). Equivalent education from abroad may be approved. In addition the candidate is required to have a minimum of three years of varied audit practice, of which a minimum of two years under supervision of a licensed public accountant, and must have passed a test of practical ability after the practice period. Auditors licensed by other countries of the European Economic Area or by a country with which Norway has a reciprocal license agreement, may be licensed as a statsautorisert revisor or a registrert revisor after having passed an aptitude. Prequalification education is undertaken by state or private universities without direct involvement by DnR. All DnR members responsible for audit engagements shall complete 105 hours, or its equivalent, of organized verifiable continuing professional education in each three-year rolling period. This is a statutory requirement. Unverifiable professional development, i.a. self studies, will come in addition to these 105 hours to fulfill the 120 hour International Accounting Education Standards Board (IAESB).requirement. Create and Enhance Awareness of IAESB and IESs 7. Reporting on IAESB actions, outputs and strategic plans to the universities and the regional colleges where relevant education is given. CEO, Technical Director DnR Technical staff 8. DnR staff participates in discussions of changes to the framework for studies of accounting and auditing subjects at regional colleges and other institutions giving education for the bachelor degree to qualify as a registered authorized public accountant. Technical Director DnR Technical staff Status as of of Publication Page 5 of 14

6 # Start Actions Completion 9. Autumn DnR has initiated and chairs a working group 2012 consisting of representatives of different audit firms to develop adjustments of the study plans for the master degree in auditing, to better meet the requirements of the audit firms and to secure recruitment of the best students to join the audit profession. Responsibility DnR Technical staff and representatives of the audit firms 10. Information on DnR website and in newsletters to members. Technical Director DnR Technical staff Assist with Incorporation of IESs in Appropriate Regulations and Accounting Curricula 11. Forum for cooperation is arranged by DnR for all the regional colleges having education programs for the bachelor degree in accounting/auditing. 12. DnR participates in the Auditor s Aptitude Test Committe ("Eksamensutvalget for praksis-prøven". This test (Praksisprøven) is a license requirement, managed by the Financial Supervisory Authority of Norway. 13. Annual meeting with the two universities having educational program preparing for master degree in accounting/auditing. CEO Organisation manager and technical staff CEO Technical manager and technical staff CEO Technical manager and technical staff Review of DnR s Compliance Information 14. Continue to perform periodic review of the response to the IFAC Compliance self-assessment questionnaire and update sections relevant to this Statement of Membership Obligations (SMO) as necessary. Technical manager Technical staff Status as of of Publication Page 6 of 14

7 Action Plan Subject: Action Plan Objective: SMO 3 - International Auditing and Assurance Standards Update Norwegian Language Versions of and Implement International Auditing and Assurance Standards Board (IAASB) Standards # Start Actions Completion Background: Responsibility DnR is recognized as a body with the authority to promulgate auditing, attestation and quality control standards relating to the preparation and issuance of audit and attestation reports. This applies to all auditors certified to perform statutory audits, not only for members of DnR. The legal basis for this authority is the requirement in the Norwegian Act on Auditing and Auditors, to conduct their audit activity in accordance with good auditing practice, and the widespread use of the standards promulgated by the DnR by practitioners and authorities. Implementation of ISAs/ISQC The Auditing Standards Committee of DnR is appointed by the Board of DnR and given the authority to prepare Norwegian translations of the standards and decide on their effective date in Norway. Auditing Standards Committee DnR technical Secretariat and committee members Prepare Norwegian translations of the Clarity IAASB Standards (ISAs and ISQC 1). Completed Jan 2010 Auditing Standards Committee Auditing Standards Committee, DnR technical staff Implementation Guidance 17. Jan 2010 Publish initial Norwegian language volume of the ISAs and ISQC 1. Completed May Aug 2009 Publish articles on the Quality ISAs. Completed Aug 2010 Publish revised documentation guidance. Completed Dec Changes consequential to the IAASB s clarity project Completed May to DnR s data based audit methodology Descartes CEO Technical Director CEO CEO Audit Manager, DnR publications staff Audit Manager, Auditing Standards Committee members DnR technical staff DnR technical and publications staff, ITconsultants Status as of of Publication Page 7 of 14

8 # Start Actions Completion Responsibility Further development of DnR s data based audit methodology Descartes to cover assurance related services. CEO DnR technical and publications staff, ITconsultants Continuing Professional Development 22. Development of new and updating of existing continuing education courses to assist with implementation of new/revised standards. Education Committee Technical staff and external consultants Contribution to Standard Setting Activities of the IAASB 23. Review of IAASB agenda materials and exposure drafts including submission of comment letters. 24. Notification to DnR members of IAASB exposure drafts through newsletters and on DnR website. Auditing Standards Committee Technical staff. CEO Technical staff Review of DnR s Compliance Information 25. Continue to perform periodic review of the response to the IFAC Compliance self-assessment questionnaire and update sections relevant to this Statement of Membership Obligations (SMO) as necessary. CEO Technical staff Status as of of Publication Page 8 of 14

9 Action Plan Subject: Action Plan Objective: SMO 4 - International Ethics Standards Board for Accountants (IESBA) Code of Ethics Ensure that the Norwegian Ethics framework, including DnR s Code of Ethics, fulfill the IESBA Code # Start Actions Completion Background: The Norwegian Act on Auditing and Auditors includes detailed independence requirements. The DnR Code of Ethics can be downloaded from the DnR website Responsibility Continue to Notify Members of the Provisions of the IESBA Code of Ethics Amendment of our ethical requirements in line with the revised IESBA Code. Remark DnRs current non-revised Code is, together with the independence- and other requirements in the Norwegian Auditors Act, fully compliant with the IFAC Code of Ethics Postponed, cf. the remark (left). Ethics and Independence Group, CEO Technical staff 27. News is published in newsletters and on DnR s website. 28. Conduct ethics education courses for members of DnR. CEO Technical staff CEO Training staff, external consultants Maintaining Processes 29. Monitor new and amended standards from the IESBA, provide and send comments to exposure drafts as needed. CEO Technical staff Continue to Counsel and Provide Advice to Members to Help Resolve Ethical Conflicts 30. Advice to members in professional crises. Committee of senior members Committee members Status as of of Publication Page 9 of 14

10 # Start Actions Completion Responsibility 31. Advice to members through DnR s electronic CEO Technical staff permanent advisory query system. Review of DnR s Compliance Information 32. Continue to perform periodic review of DnR s response to the IFAC Compliance self-assessment questionnaire and update sections relevant to this Statement of Membership Obligations (SMO) as necessary. CEO Technical staff Status as of of Publication Page 10 of 14

11 Action Plan Subject: Action Plan Objective: SMO 5 - International Public Sector Accounting Standards (IPSASs) and Other IPSASB Guidance Promote Accrual Accounting in Public Sector and Harmonization with IPSASs # Start Actions Completion Background: Responsibility DnR will continue to use its best endeavors to encourage the Norwegian government authorities to implement accrual accounting in local and central government, to harmonize with the IPSASB where appropriate. Promote Harmonization with IPSASs 33. DnR participates nationally in a number of seminars and meetings on accrual accounting. Technical Director Technical staff Maintaining Processes 34. Participate in the government s review of IPSAS proposals. Communicate the activities on the DnR web-site. 35. Promote IPSASB activities in various presentations given in the Norway. Continue to identify opportunities to further assist in promoting harmonization. DnR Technical Director DnR Technical Director Technical staff Technical staff Review of DnR s Compliance Information 36. Continue to perform periodic review of the response to the IFAC Compliance self-assessment questionnaire and update sections relevant to this Statement of Membership Obligations (SMO). CEO Technical staff Status as of of Publication Page 11 of 14

12 Action Plan Subject: Action Plan Objective: SMO 6 - Investigation and Discipline Maintenance of Investigation/Enforcement Process # Start Actions Completion Responsibility Background: The quality control program (cf. SMO 1) generates reports to the Financial Supervisory Authority of Norway (responsible for Investigation and Discipline) in cases where withdrawal of the auditor s license should be considered. The Financial Supervisory Authority of Norway will investigate as necessary. The enforcement process is entirely conducted by the Financial Supervisory Authority of Norway according to Norwegian Auditing and Public Oversight legislation. Investigation and Discipline Program and Follow Up 37. Report auditors not complying with the professional standards to the Financial Supervisory Authority of Norway in cases where withdrawal of the auditor s license should be considered. According to Quality Control plan. DnR Quality Control Committee, the Board of DnR Quality Control Manager Review of DnR s Compliance Information 38. Continue to perform periodic review of the response to the IFAC Compliance self-assessment questionnaire and update sections relevant to this Statement of Membership Obligations (SMO) as necessary. CEO Technical staff Status as of of Publication Page 12 of 14

13 Action Plan Subject: Action Plan Objective: SMO 7 - International Financial Reporting Standards (IFRSs) Continue to Use Best Endeavors to Maintain and Continuously Improve the Program for Adoption and Implementation of IFRS # Start Actions Completion Responsibility Background: Norwegian listed companies are required to use IFRS in consolidated financial statements. Other companies have the option to use IFRS as an alternative to Norwegian. Generally Accepted Accounting Principles (GAAP). DnR provides training on IFRS and publishes relevant guidance. Awareness of IFRS Among the Audit Profession and General Public 39. Publish books on IFRS. Publish articles on IFRS in CEO, authors. Publishing staff, technical DnR s magazines. staff, and recognized authors. 40. Publish IFRS news on DnR s website. CEO Technical staff 41. Provide secretariat assistance to the Norwegian Standard Setter. CEO Technical staff Education and Training on IFRS 42. Offer administrative support to the IFRS Academy run by the Norwegian Accounting Standards Board, Deloitte, Ernst & Young (EY) and PricewaterhouseCoopers (PWC). CEO DnR technical staff and DnR training staff 43. Design, develop and offer IFRS education courses to members. Education Committee, CEO Training staff, technical staff, and skilled auditors. Implementation of IFRS 44. Contact with the Norwegian Authorities addressing matter on IFRS-implementation. CEO Technical staff Development of IFRS Status as of of Publication Page 13 of 14

14 # Start Actions Completion Responsibility 45. Contribute to comment letters to proposals from the International Accounting Standards Board (IASB) through involvement in FEE and The Norwegian Accounting Standards Board. CEO Technical staff IFRS for SMEs 46. November 2009 Support and promote implementation of IFRS for SMEs in Norway. When implemented CEO Technical staff Remark: Norwegian Government Authorities have no immediate plan to implement or facilitate IFRS for SMEs in Norway. Review of DnR s Compliance Information 47. Continue to perform periodic review of the response to the IFAC Compliance self-assessment questionnaire and update sections relevant to this Statement of Membership Obligations (SMO) as necessary. CEO Technical staff Status as of of Publication Page 14 of 14