Norwegian Auditor Practical Exam (Statsautorisert revisor) common mistakes
Norwegian Auditor Practical Exam (Statsautorisert revisor) · Understand the traps and how to avoid them.
When a client proposes a material journal entry to adjust revenue recognition, the candidate accepts the client's calculation without independently verifying the underlying contract terms or the applicable IFRS 15 performance obligations.
Candidates often rely on the client's accounting manual or prior-year working papers, assuming consistency with previous treatment, and underestimate the risk that contract terms have changed or that the client's application of the standard is incorrect.
What to do instead
For every material adjustment, obtain and read the actual contract, identify distinct performance obligations, and test the allocation of transaction price and timing of recognition against IFRS 15 (or Norwegian GAAP if applicable). Document the specific paragraphs applied and the evidence reviewed.
The candidate designs audit procedures that are not responsive to the assessed risks of material misstatement, for example by using the same substantive testing approach for a low-risk cash account and a high-risk revenue account with complex cut-off issues.
Time pressure and reliance on standard audit programs lead candidates to apply a uniform checklist rather than tailoring procedures to the specific risk factors identified during planning.
What to do instead
For each significant risk, explicitly link the planned procedure to the risk in the audit plan: state the risk, the assertion affected, and the nature, timing and extent of procedures. Use professional judgment to increase scepticism and modify procedures where risks are higher.
The candidate fails to identify and evaluate threats to independence when the audit firm provides non-audit services, such as tax advisory or internal control recommendations, to an audit client that is a public interest entity.
Candidates often focus only on the audit work and overlook the broader regulatory framework, including the Norwegian Auditors Act and EU rules, which prohibit certain non-audit services and require safeguards for others.
What to do instead
Before accepting or continuing an engagement, perform a documented independence assessment: list all services provided, evaluate them against prohibited services for public interest entities, and apply safeguards (e.g., separate engagement teams, fee caps, audit committee approval) where permitted. Document the conclusion.
The candidate treats the board of directors' responsibility for the financial statements as secondary and fails to obtain sufficient appropriate evidence that the board has fulfilled its duties, for example by not reviewing board minutes or not confirming that the board has approved the financial statements.
Candidates concentrate on the numbers and forget that the audit opinion is addressed to the shareholders and that the board's responsibilities under the Norwegian Accounting Act and company law are a key part of the governance context.
What to do instead
Review board minutes and relevant resolutions, confirm the date of board approval, and assess whether the board's report (årsberetning) is consistent with the financial statements and statutory requirements. Document the review and any inconsistencies.
The candidate calculates taxable income by simply applying the accounting profit and the standard tax rate, without adjusting for permanent and temporary differences, tax-exempt income, non-deductible expenses, or changes in tax rates.
Candidates often lack practical experience with Norwegian tax law and rely on the client's tax return without testing the tax reconciliation or understanding deferred tax calculations.
What to do instead
Prepare or review a detailed tax reconciliation: start with accounting profit before tax, adjust for permanent differences (e.g., non-deductible entertainment, tax-exempt dividends), temporary differences (e.g., depreciation, provisions), and apply the correct tax rate. Verify deferred tax assets/liabilities and assess recoverability.
The candidate accepts the client's IT general controls (ITGC) description at face value and does not test the operating effectiveness of controls such as user access management, change management, or backup procedures, even when relying on automated controls or system-generated reports.
Candidates may lack IT audit knowledge and assume that the IT department's policies are sufficient, or they may not understand how ITGC deficiencies affect the reliability of automated controls and data integrity.
What to do instead
When planning to rely on automated controls or system reports, first evaluate the design and implementation of relevant ITGCs, then test their operating effectiveness (e.g., inspect access logs, test a sample of changes, observe backup restoration). If ITGCs are ineffective, design substantive procedures instead.
The candidate documents audit work in a way that is not sufficient for an experienced auditor with no previous connection to the audit to understand the nature, timing and extent of procedures performed, the results, and the conclusions reached.
Candidates often write brief notes or rely on memory, especially when working under time pressure, and do not appreciate that audit documentation must stand alone as evidence of compliance with standards.
What to do instead
Follow the firm's documentation standards and ISAs: for each procedure, record the purpose, the source of information, the work performed, the findings, and the conclusion. Use cross-references and ensure that the file includes the audit plan, risk assessments, and significant judgments. Review the file as if you were an independent reviewer.
The candidate performs a business analysis of the client without linking it to the audit risk assessment, for example by calculating financial ratios but not using them to identify areas of higher risk or to challenge management's assumptions.
Candidates may treat analytical procedures as a mechanical exercise required by the audit program, rather than as a tool to understand the entity and its environment and to focus audit effort.
What to do instead
Use analytical procedures at the planning stage to identify unusual fluctuations or trends, investigate significant deviations, and document how the results affected the risk assessment and the nature, timing and extent of further procedures. Compare expectations with recorded amounts and obtain corroborating evidence.
The candidate fails to evaluate the appropriateness of the going concern assumption when there are indicators of financial distress, such as recurring losses, negative operating cash flows, or covenant breaches, and does not obtain sufficient evidence about the entity's ability to continue.
Candidates may rely on management's optimistic cash flow forecasts without challenging the underlying assumptions, or they may not be familiar with the requirements of ISA 570 and the Norwegian accounting act regarding disclosure.
What to do instead
Assess management's going concern assessment: review cash flow forecasts, sensitivity analysis, and available financing arrangements; consider the feasibility of management's plans; and evaluate the adequacy of disclosures. If material uncertainty exists, ensure the auditor's report includes an emphasis of matter or a qualified opinion as appropriate.
The candidate communicates with those charged with governance only at the end of the audit, for example by sending a management letter with control deficiencies after the audit report has been issued, rather than throughout the engagement.
Candidates may view communication as a formality and not appreciate that timely communication of significant findings, especially those affecting the audit opinion or internal control, is required by auditing standards and professional ethics.
What to do instead
Plan communication with those charged with governance at the beginning of the audit: agree on the timing and form of communications, and promptly report significant matters such as material weaknesses in internal control, fraud, or disagreements with management. Document all communications and their resolution.