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    Country by Country Financial Reporting and Auditing Framework

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    Sweden – Crowe Horwath Sweden (prepared December 2014)

    Apart from the law, companies have to comply with complementary accounting standards. The complementary accounting standards may not be in conflict with the Annual Accounts Act. AB publ. may choose to apply accounting standards from the Bokföringsnämnden or the Redovisningsrådet or a combination of those standards. Standards from Redovisningsrådet are to a large extent a translation from International Accounting Standards (IAS) issued before 2003, with some Swedish adjustments due to Swedish tax and limitations due to the Annual Accounts Act. These standards have not been updated since 2005. Standards from the Bokföringsnämnden are based on standards from Redovisningsrådet but with some simplifications.

     

    Audit Requirements for Corporations and Partnerships Registered in Sweden

    In Sweden, the Book Keeping Act and the Annual Accounts Act provide definitions (also based on Fourth Council Directive 78/660/EC)) of small and large companies where the definition remains the same for all legal forms.

     

    All companies that are listed on a stock exchange are considered large companies. In addition, companies that reach more than one of the following criteria during the last two financial years are also defined as large companies:

    • Net turn over: more than SEK (Swedish Krona) 80,000,000 (nearly € 8,000,000);
    • Balance sheet total: more than SEK 40,000,000 (nearly € 4,000,000);
    • Number of employees (average): more than 50.

    Companies that are not listed or do not reach more than one of these criteria are considered small companies.

     

    All limited companies are subject to an audit except as exempted below.      

     

    All audits must comply with ISA (International Standards on Auditing) and generally accepted auditing standards in Sweden.

     

    Audit Exemption

    All limited companies are subject to an audit with an exemption for the smaller private limited liability company who can, from 1 Nov. 2010, choose not to be subject to a full audit. Small private limited liability company are those that don't exceed more than one of the following criteria:

    • Net turn over: more than SEK (Swedish Krona) 3,000,000 (nearly € 300,000); 
    • Balance sheet total: more than SEK 1,500,000 (nearly € 150,000);
    • Number of employees (average): more than 3.

    There are no requirements of auditing for Sole Traders. Sole Traders have no requirements of publishing annual financial statement or simplified annual financial statement.

     

    Audit Appointment, Rotation and Joint Audits

    The financial statements of an AB publ. have to be audited by an approved public accountant or authorized public accountant, in accordance with the Companies Act.

     

    An ek.för has to have at least one auditor. For a small ek.för there is no requirement for the auditor to be approved or authorized.

     

    Auditing Standards

    All audits must comply with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden.

     

    Ethical Framework

    Statutory audit in Sweden is carried out according to the legal standard -god revisionssed- (Generally Accepted Auditing Standards in Sweden). For fiscal years beginning after January 1st 2011, the standard includes requirements to apply International Standards on Auditing (ISA) and ISQC 1. These standards are extended with the specific Swedish add-on regarding audit of the management's administration. Provisions on independence are laid down in the Swedish Auditors Act. The rules are built on a principle based approach.

     

    Audit Regulation

    All Swedish auditing firms are subject to the following external and internal monitoring processes with regard to their audit practice by the Swedish Supervisory Board of Public Accountants. All Swedish Crowe Horwath members are part of a Crowe Horwath Quality Control Program that is approved by the Institute and the Swedish Supervisory Board of Public Accountants.

     

    External Monitoring

    The audit practices of all Swedish auditing firms are subject to periodic external peer reviews. The peer reviews have to be completed every six years. Member firms that also perform audits for public interest entities are required to have their peer reviews successfully completed every three years.

     

    Internal Monitoring

    All Swedish member firms have established an annual firm wide monitoring process known as internal inspections. The internal inspections are led by the Quality Assurance Partner within the respective firm. The internal inspections are conducted following procedures defined by the institute and cover all certified auditors of a firm who perform statutory audit engagements. The results of the annual internal inspections are used to develop and further enhance the quality of the audit processes within the Swedish member firms.

     

    Transparency Report

    The Swedish Crowe Horwath members prepare an annual transparency report that is available on the websites and cover information about the respective audit firm's governance and ownership structure, its quality control and monitoring system, its independence policies and measures, its continuing professional education processes and its remuneration principles for senior personnel.


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