What is the Accounting Act?

The Accounting Act is the central piece of legislation that regulates how Norwegian companies must keep accounts and store accounting materials. The act ensures transparent and correct accounting through detailed requirements for bookkeeping , documentation and reporting.

Purpose and Scope of the Accounting Act

The main purpose of the Accounting Act of 19 November 2004 No. 73 is to:

• Ensuring correct accounting in Norwegian companies
• Protect creditors and other stakeholders
• Facilitate tax control and public oversight
• Promoting trust in Norwegian business
• Standardize accounting practices across industries

Who is covered by the Accounting Act?

The Accounting Act applies to everyone who conducts commercial activities in Norway:

• Sole proprietorships with turnover over NOK 5 million
• Joint stock companies ( AS ) regardless of size
• Limited liability companies and limited partnerships
• Foundations and associations with commercial activities
• Public enterprises that carry out commercial activities

Main requirements in the Accounting Act

Accounting Obligation and Basic Principles

The Accounting Act establishes the obligation to keep accounts for Norwegian businesses and sets strict requirements for how the accounts must be kept:

Basic Accounting Principles:

• Completeness: All business events should be recorded
• Accuracy: Records must be correct and documented
• Clarity: The accounts should be understandable and clear.
• Continuity: The same principles should be used from year to year
• Caution: Uncertainty should be handled conservatively

Accounting System Requirements

The Accounting Act places specific requirements on the accounting system :

Claim	Description	Legal basis
Chronological registration	All transactions should be recorded in chronological order	Section 4
Systematic registration	Transactions should be classified by type	Section 4
Traceability	Clear connection between vouchers and registrations	Section 5
Security	Protection against loss and unauthorized changes	Section 6
Availability	The accounts must be available for inspection.	Section 7

Documentation requirements and document processing

Document requirements

The Accounting Act requires that all accounting entries be documented with vouchers :

Mandatory Information on Attachments:

• Date of transaction
• Amount in Norwegian kroner
• Description of the transaction
• Counterparty (who the transaction concerns)
• Posting to the correct accounts
• Authorization from responsible person

Special Documentation Requirements

Specific requirements apply to different types of transactions:

Sales transactions:

• Invoice with all legally required information
• Documentation of delivery
• Proof of payment for cash sales

Purchase transactions:

• Supplier invoice or receipt
• Receipt or delivery confirmation
• Certification of the accuracy of the invoice

Payroll transactions:

• Payslip and A-melding
• Employment contracts and timesheets
• Documentation of employer contributions

Storage rules

Retention obligation

The Accounting Act requires systematic storage of accounting records:

Shelf life:

Material	Storage time	Legal basis
Accounting documents	5 years	Section 13
Annual accounts	10 years	Section 13
Audit report	10 years	Section 13
Documentation of accounting system	5 years	Section 13
Correspondence	5 years	Section 13

Storage method:

• Paper-based: Original documents in secure archives
• Electronic: Digital copies with authenticity and integrity
• Microfilm: Approved alternative for older documents
• Combined: Mix of paper and electronic solutions

Electronic Storage Requirements

Special requirements apply to electronic storage :

• Readability: Documents must be readable throughout the entire retention period
• Searchability: Efficient retrieval of documents
• Security: Protection against loss and unauthorized changes
• Traceability: Documentation of all changes
• Accessibility: Quick access for control purposes

Fiscal Year and Reporting Deadlines

Fiscal year

The Accounting Act regulates the length and closing of the accounting year:

Standard Fiscal Year:

• Calendar year: January 1 to December 31 (most common)
• Deviating fiscal year: Allowed with special justification
• First fiscal year: Can be shorter or longer than 12 months

Deadlines for Financial Statement Closing

Business type	Deadline for annual accounts	Tax return deadline
Sole proprietorship	May 31	May 31
Joint stock company	6 months after the end of the financial year	May 31
Responsible company	May 31	May 31
Foundations	6 months after the end of the financial year	May 31

Consequences of Deadline Violation

Delays can result in:

• Penalty from the Norwegian Accounting Register
• Tax surcharge from the Norwegian Tax Administration
• Loss of credit confidence with banks and suppliers
• Legal consequences for serious violations

Supervision and Control

Public Supervision

Several public bodies oversee compliance with the Accounting Act:

The Accounting Register:

• Registration of annual accounts
• Checking submitted accounts
• Follow-up on missing submissions
• Sanctions for rule violations

The Tax Administration:

• Accounting control in connection with tax audits
• Assessment of the quality of accounting
• Requirements for documentation and explanations
• Discretionary appointments in the event of inadequate accounting

The Financial Supervisory Authority:

• Supervision of financial institutions and listed companies
• Control of financial reporting
• Enforcement of accounting standards

Audit obligation

For many businesses, auditing is mandatory:

The audit obligation applies to:

• Joint-stock companies above certain size limits
• Public limited liability companies (ASA)
• Foundations with large turnover
• Businesses with public support

Auditor's Responsibilities:

• Checking the quality of accounting
• Assessment of accounting principles
• Reporting of significant errors
• Confirmation of legality

Sanctions and Consequences

Administrative Sanctions

Violations of the Accounting Act may result in administrative sanctions :

Mandatory fine:

• Daily penalty for late submission of annual accounts
• Increasing amounts for continued non-compliance
• Maximum amount set in regulations

The Accounting Register can:

• Refuse to register defective accounts
• Require reversal of incorrect financial statements
• Mandating the correction of system errors
• Report serious violations to the prosecutor's office

Criminal Sanctions

Serious violations may result in penalties:

Punishable Acts:

• Intentional incorrect accounting
• Gross negligence in accounting
• Destruction of accounting records
• Obstruction of public control

Penalties:

• Fines for less serious violations
• Imprisonment up to 1 year for serious violations
• Forfeiture of financial dividends
• Compensation liability towards injured parties

Civil Consequences

Violations can also have civil law consequences :

• Compensation liability towards creditors
• Loss of credit confidence in financial institutions
• Problems with public grants and support
• Difficulties in selling the business

Practical Advice for Compliance

Establishing Good Routines

To ensure good compliance with the Accounting Act:

Daily Routines:

• Systematic journal entry for all transactions
• Regular reconciliation of accounts
• Checking bank reconciliation
• Follow-up of accounts receivable

Monthly Routines:

• Complete reconciliation of all balance sheet items
• Checking VAT returns
• Review of income statement
• Working capital follow-up

Annual Routines:

• Preparation for closing the accounts
• Review of depreciation
• Control of balance sheet
• Audit of accounting principles

Technological Solutions

Modern accounting systems can help with compliance:

Automation:

• Automatic posting of standard transactions
• Integrated controls to catch errors
• Electronic receipt of documents
• Automatic backup and archiving

Control mechanisms:

• Built-in validation rules
• Automatic reconciliation of accounts
• Reports for deviation identification
• Access control and traceability

Competence development

Continuous learning is important for good compliance:

• Training in accounting and bookkeeping
• Update on changes in regulations
• Professional network with other accountants
• Professional advice on complex issues

Changes and Future Developments

Digitization and Modernisation

The Accounting Act is being adapted to digital developments :

Ongoing Changes:

• Electronic invoicing is becoming more widespread
• Automated accounting through AI and machine learning
• Real-time reporting to public authorities
• Blockchain technology for increased traceability

Future Opportunities:

• Standardized APIs for data exchange
• Automatic tax calculation and reporting
• Predictive analytics for better financial management
• Integrated control systems across authorities

International Standards

Norway adapts to international accounting standards :

• IFRS for listed companies
• Harmonization with EU directives
• Increased focus on sustainability reporting
• Standardization of accounting practices

Summary and Conclusion

The Accounting Act is the foundation for transparent and reliable accounting in Norway. The Act ensures that:

Main points:

• All business owners have a duty to keep accounts in accordance with legal requirements.
• Systematic documentation and storage is mandatory
• Public oversight ensures compliance and quality
• Sanctions for violations can be severe
• Good routines and modern technology make compliance easier

Practical Recommendations:

• Invest in good accounting systems and routines
• Stay up to date on changes in regulations
• Seek professional advice when in doubt
• Prioritize accounting quality as a basis for good corporate governance

The Norwegian Accounting Act is not only a legal requirement , but also a tool for better financial management and increased confidence in business. By following the requirements of the Act, companies ensure both regulatory compliance and a solid basis for strategic decisions.