Article 25 in the Faroese Auditing Act requires audit firms, rendering auditing services to entities of particular public interest to publish a Transparency Report.

1. Legal organisation and ownership
Sp/F Grannskoðaravirkið INPACT is a private company with limited liability. Auditors, which are authorised according to the Faroese Auditing Act, or companies 100% owned by such persons, possess all shares in the SP/F Grannskoðaravirkið INPACT with equal share interest.

2. Legal organisation and ownership
Sp/F Grannskoðaravirkið INPACT is governed by a one-tier management system, which means that the company is governed by a Board of Executives and has no Board of Directors. The Board of Executives consists of:

• Jógvan Amonsson, State Authorized Public Accountant
• Fróði Sivertsen, State Authorized Public Accountant
• Heini Thomsen, State Authorized Public Accountant
• Jógvan Joensen, Authorized Public Accountant

The Board of Executives share equal responsibilities and the executives are involved in the daily management of the firm, as well as perform assurance services to clients.

The share holders exercise their voting rights at the annual general meeting, in which primarily electing executives and independent auditor, adopt and amend articles of association and approve annual accounts takes place. The share holders have entered into a shareholders’ agreement, where the internal rights and duties between the shareholders are agreed.

3. Network information and legal and organisational agreements with the network
Sp/F Grannskoðaravirkið INPACT is a member of Revisorgruppen Danmark, which is a network of State Authorized Public Accountants firms in Denmark, Greenland and the Faroe Islands. Revisorgruppen Danmark is consisting of 25 member firms and is employing around 1,500 accountants in total. Revisorgruppen Danmark is organised in the legal form of a common purchasing entity.

This organisation form means that each separate member of RevisorGruppen Danmark is an individual legal entity, who is not responsible for the work of other member firms or legally liable for each other’s liabilities. The RevisorGruppen Danmark office is employing 11 people.

RevisorGruppen Danmark takes care of issues which most practically can be solved in common. These are amongst others

• Internal quality control, in which the RevisorGruppen Danmark office performs annual ex-post quality control of the work of each State Authorized Public Accountant.
• Takes care of education at all levels of competence in the member firms.
• Development and maintenance of systems and tools for the use on assurance jobs and consultancy and other services in the member firms
• Maintenance of standards for annual reports and other materials
• Information for the use of member firms and clients

Revisorgruppen Danmark is governed by a board of Directors and a CEO. The Board of Directors are elected at the AGM, at which each member firm has one vote.

Sp/F Grannskoðaravirkið INPACT is member of the alliance INPACT International, in which Firms resident to Europe, Africa and South America can become members. INPACT International is cooperating with INPACT Pacific and INPACT Americas, making the INPACT Alliance world-wide.  

Sp/F Grannskoðaravirkið INPACT is also member of INPACT Audit, a world-wide network of accounting firms, which is a member of the Forum of Firms

4. Basis for partner remuneration
Sp/F Grannskoðaravirkið INPACT has four partners, which are also members of The Board of Executives. The partners are obligated to spend all their efforts in the firm. Based on this precondition, the remuneration to the partners is equally distributed. The remuneration consists of net revenues after deduction of all expenses, including salaries paid to staff.

5. The Quality Control System, including policies on independence and continuous education
Sp/F Grannskoðaravirkið INPACT is, along with all other auditing firms, obligated to comply with auditing legislation, ethical framework and International Standards on Auditing.

The Board of Executives are responsible for developing and maintaining quality control systems as well as making sure that the quality control system is adhered to at all times.

The individual partner is responsible for employing the quality control system, and all employees are responsible for passing on relevant information in case weaknesses in the quality control are discovered.

The total quality control system is reviewed and revaluated annually in cooperation with Revisorgruppen Danmark. 

Quality Control is exercised throughout the process by instruction and control from planning to conclusion, the partners and experienced auditors oversee that the job at hand is done according to regulations and standards.

Each year, a certain number of jobs are reviewed to ensure that the quality control system is employed and that the assurance report given is appropriate.

Every third year, the Authorities perform a similar quality control.

On all assurance services rendered to entities of significant public interest or jobs including particular auditing risk, reports are signed by two partners in common.

Sp/F Grannskoðaravirkið INPACT requires documentation on compliance to legal, ethical and internal requirements on independence on each individual job. This documentation is reviewed as part of ex-post quality control. In addition to documentation on independence on individual jobs, all employees annually sign to the fact that they are familiar with the contents of, and comply with regulations on independence.

We do attend to the requirement that partners in charge of assurance jobs for public interest entities are rotated every 7 years. Additionally, through the RevisorGruppenDanmark database on public interest entities, we make sure that the independence requirements are adhered to by all members of the RGD network.

All employees in Sp/F Grannskoðaravirkið INPACT participate in educational courses on a regular basis. For State Authorised Public Accountants the mandatory 120 hours of on-service education on a 3 year basis are complied with. However all registered accountants have returned their registration to Skráseting Føroya, they are obligated to follow the same educational requirements. 

6. Frequency of Quality Control Reviews
Although mandatory quality control is not yet started, Sp/F Grannskoðaravirkið INPACT has had external quality control 5 times since 1995.

Network based Quality Control was performed by RevisorGruppenDanmark in November 2010.

7. Declaration from responsible Board of Executives, that the quality control is effective, and policies on independence are adhered to
The Board of Executives believe, that the quality control system is effective, and that policies on independence are adhered to.

Systems and internal control reduce the risk of errors, but cannot totally exclude that risk. The Quality Control has not discovered any weaknesses in that respect. 

8. Financial information including revenues segmented into remuneration for financial assurance, remuneration for other assurance services, tax advisory and other services rendered.

Auditing Financial reports	72%
Other Assurance Services	16%
Tax advisory	9%
Other services	3%
Total	100%

9. List of entities with particular public interest, for which Sp/F Grannskoðaravirkið INPACT has rendered assurance services during last financial year.

Publicly Listed Companies:

Companies with limited liability, owned by the government

• P/F Vágatunnilin
• P/F Norðoyatunnilin
• P/F Vága Floghavn

Municipalities, or entities owned by municipalities (art. 51 Act of Municipal Authority)

• Runavíkar Kommuna
• Fuglafjarðar Kommuna
• Vága Kommuna
• Viðareiðis Kommuna
• Eiðis Kommuna
• Skálavíkar Kommuna
• Fámjins Kommuna
• Sumbiar Kommuna
• IRF

Entities, subject to the supervision of the Financial Sector Supervisory Authority or the Insurance Sector Supervisory Authority

• P/F Føroya Lívstrygging
• P/F Tryggingarfelagið Lív
• Húsalánsgrunnurin