Review process

Who is selected for review?
The Council conducts its supervisory work through an annual selection of companies, based on risk-based assumptions in combination with a random respectively rotating schedule to ensure that all companies in the population are reviewed at least once every ten years. Most of the selection is normally done early in the year, although reviews may be initiated at other times due to information and circumstances that may affect the financial transparency of individual companies. We may also contact individual companies to investigate more specified areas or to gather information in conjunction with thematic inquiries.

Who conducts the review?
The review is conducted by groups of co-chairs based on a model used by the German accounting supervisory board, Deutsche Prüfstelle für Rechnungslegung (FREP), a well-proven system that has functioned successfully for more than ten years.

A group of co-chairs is comprised of the Council’s chair, deputy chair and a third member. The companies selected for review are randomly assigned to a group of co-chairs, which then appoints a member of the Council to be responsible for reviewing the company’s financial information. This responsible reviewer is also the company’s main contact person during the review process. The co-chair group also selects a member responsible for quality assurance of the review, who provides expertise and serves as a sounding board for the responsible reviewer. With pre-designated co-chair groups to which financial reports are randomly allocated, along with quality assurance of the reviews, this method is aimed at ensuring that the Council is independent in its review and is focused on fundamentally significant issues.

Review process
The review process normally involves responding to a questionnaire based on notes taken by the Council in its examination of the company’s financial reporting. During the review, we may request clarifying information or supplementary documentation to determine the basis for the company’s choice of application of accounting policies. Communication is mainly conducted electronically and in writing. Nevertheless, the Council works in an open and transparent manner and places great value on a well-functioning, constructive dialogue with the companies. In the event a company wishes to meet with us, we are happy to do so to the extent time and resources allow.

At the conclusion of the review, the co-chair group reaches a decision on whether any violations of applicable regulations have taken place and, if so, measures to be taken by the Council.

The Council’s authority
The Council does not have sanctioning authority. In the event the group of co-chairs finds that the company has failed to prepare its financial information in accordance with applicable regulations and the errors can be considered minor, the Council will request the company to correct the errors in future financial reports or to publish a correction.
In the event the Council deems that the errors cannot be considered minor, or the company fails to cooperate or fails to comply with the Council’s request, all relevant details of the case shall be submitted immediately to the Swedish Financial Supervisory Authority (SFSA), which will conduct an independent review of the violation. In the event the SFSA finds that the violation cannot be considered minor, it may issue a warning and impose a penalty fee pursuant to Chapter 25 of the Security Markets Act.

The Council’s final positions are published on an ongoing basis in an anonymous format on the Council’s website.