Control and audits
Internal control, control environment, control activities and follow-up
The purpose of internal control regarding financial reporting is to insure that it is reliable and that the financial reports follow generally accepted accounting principles and otherwise follow applicable laws and regulations concerning listed companies. The Board ultimately has responsibility for an effective, functioning internal control in the Group and the CEO is responsible for an organization and processes that ensure the quality of financial reports to the Board and the market.
The control environment at Elanders is characterized by the proximity between Executive Management and the operating units. Executive Management or representatives from the treasury function regularly visit these units and evaluate internal control and financial reporting. All subsidiaries use a uniform system to report in all financial information. Executive Management has a continuous dialogue with the operating units and has issued a number of steer documents and policies concerning internal control which have been dispersed to all concerned personnel. To regularly monitor that these documents are followed and that internal control functions effectively, subsidiaries make an evaluation of their internal control in relation to the Group’s established goals.
The result of the evaluation is then followed up by the Group’s treasury function in collaboration with the external auditors. During 2009 all the subsidiaries made an evaluation of their internal control which led to some improvements that are now being followed up, and which mainly have to do with the documentation of existing control routines.
The results of the work with internal controls are presented to the Board’s auditing committee, which also provides Executive Management with guidance regarding improvements in internal control. All the members of Executive Management, except the CEO and CFO, are also managers in one of the Group’s larger operating units. These units generate 73 % of Group net sales.
Special audit function, internal audit
Elanders does not have a special internal audit function. This function is performed by Executive Management and the Group treasury function, supported by the auditing committee and the external auditors. Because of the size of the Group and Executive Management’s operative character a special audit function, internal audit, would not have any significant beneficial effect. A continuous dialogue between the company and the external auditors as well as the controls carried out by Executive Management are considered sufficient to ensure that internal controls maintain an acceptable level. This assessment is continuously evaluated and will be tested once again in 2010.
External audit
Auditing is regulated by the Companies Act which requires that auditors must review the company’s annual accounts and the Board’s and the CEO’s administration.
The Annual General Meeting 2008 chose for a period of four years the authorized public accounting company PricewaterhouseCoopers AB with the authorized public accountant Mikael Eriksson as head auditor, assisted by the authorized public accountant Johan Rippe. Mikael Eriksson is the auditor for, among others, G&L Beijer, Midway, Sveaskog, Readsoft, Beijer Electronics and Seco Tools. Johan Rippe is the auditor for, among others, Getinge, Alliance Oil Ltd and AB Volvo.
Once a year the auditors meet the Board in its entirety without the CEO or any other member of Executive Management present, normally at the meeting that deals with the annual accounts.
Last updated:
4/15/2010
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