Investor Presentaiton
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk Strategic Aspirations
Risks
Management
Consolidated statements
Additional information.
Independent Auditor's Report
To stakeholders of Novo Nordisk A/S
96
96
Report on the Financial Statements
Opinion
We have audited the consolidated financial statements and the parent financial statements of
Novo Nordisk A/S for the financial year 1 January 2023 - 31 December 2023, which comprise the
income statement, balance sheet, equity statement and notes, including a summary of material
accounting policy information, for the Group as well as the Parent, and the statement of
comprehensive income and the cash flow statement of the Group (collectively referred to as the
'Financial Statements'). The consolidated financial statements are prepared in accordance with
IFRS Accounting Standards as endorsed by the EU and additional requirements of the Danish
Financial Statements Act, and the parent financial statements are prepared in accordance with
the Danish Financial Statements Act.
In our opinion, the consolidated financial statements give a true and fair view of the Group's
financial position at 31 December 2023, and of the results of its operations and cash flows for
the financial year 1 January 2023 - 31 December 2023 in accordance with IFRS Accounting
Standards as endorsed by the EU and additional requirements under the Danish Financial
Statements Act.
Further, in our opinion, the parent financial statements give a true and fair view of the Parent's
financial position at 31 December 2023, and of the results of its operations for the financial year
1 January 2023 - 31 December 2023 in accordance with the Danish Financial Statements Act.
Our opinion is consistent with our Long-form Auditor's report issued to the Audit Committee
and the Board of Directors.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAS) and the
additional requirements applicable in Denmark. Our responsibilities under those standards and
requirements are further described in the Auditor's responsibilities for the audit of the
consolidated financial statements and the parent financial statements section of this auditor's
report. We are independent of the Group in accordance with the International Ethics Standards
Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code) and
the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, we have not provided any prohibited non-audit
services as referred to in Article 5(1) of Regulation (EU) No 537/2014.
We were appointed auditors of Novo Nordisk A/S for the first time on 25 March 2021, for the
financial year 2021. We have been reappointed annually by decision of the general meeting for a
total continuous engagement period of three years up to and including the financial year 2023.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements and the parent financial
statements for the financial year 1 January 2023 - 31 December 2023. These matters were
addressed in the context of our audit of the consolidated financial statements and the parent
financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter
US sales rebates
Refer to notes 2.1 and 3.5 in the consolidated financial statements.
In the United States (US), sales rebates are paid in connection with public healthcare insurance
programmes, namely Medicare and Medicaid, as well as rebates to pharmacy benefit managers
and managed healthcare plans. In January 2021, the Group changed its policy in the US related to
the 340B Drug Pricing Program, whereby Novo Nordisk no longer provides 340B statutory
discounts to certain pharmacies that contract with covered entities participating in the 340B Drug
Pricing Program. Novo Nordisk has only recognised revenue related to the 340B Drug Pricing
Program to the extent that it is highly probable that its inclusion will not result in a significant
revenue reversal in the future. When sales are recognised, Novo Nordisk also records provisions
for the expected value of the sales deductions (variable consideration) at the time the related
sales are recorded.
The US sales rebates, including provisions related to the 340B Drug Pricing Program, involved
significant measurement uncertainty as the provisions are based on legal interpretations of
applicable laws and regulations, historical claims experience, payer channel mix, current contract
prices, unbilled claims, claims submission time lags and inventory levels in the distribution
channel. Consequently, we considered this to be a key audit matter.
How our audit addressed the key audit matter
We evaluated the appropriateness of the methodology used to develop sales rebates provisions,
including provisions related to the 340B Drug Pricing Program, by involving audit professionals
with industry and quantitative analytics experience to assist us in performing our auditing
procedures.
We tested the effectiveness of controls relating to sales rebates, including controls over the
assumptions and data used to estimate these rebates.
We tested rebate claims processed, including evaluating those claims for consistency with the
conditions and terms of rebate arrangements.
We tested the overall reasonableness of the accruals recorded at period end by developing an
expectation for comparison to actual recorded balances.
We evaluated Management's ability to estimate sales rebates accurately by considering the
historical accuracy of the estimates in prior year.View entire presentation