The board of directors’ responsibility for the internal control is governed by the Swedish Companies Act, the Swedish Annual Accounts Act – which states that information regarding the most important elements of Flerie’s internal control and risk management in connection with the financial reporting each year must be included in the corporate governance report – and the Code. The board of directors is, inter alia, responsible for that Flerie has a good internal control and formalised routines that ensure that established principles for financial reporting and internal control are complied with. It is also responsible to ensure that there are adequate systems for follow-up and control of Flerie’s activities and the risks that the Company and its activities are associated with.
The overall purpose of the internal control is to, to a reasonable extent, ensure that the Flerie’s operative strategies and objectives are followed-up on and that the shareholders’ investments are protected. Furthermore, the internal control aims to ensure that the external financial reporting, with reasonable safety measures, is reliable and prepared in accordance with generally accepted accounting principles, and that applicable law and regulations as well as other requirements imposed on listed companies, are complied with. The control environment is the foundation for the internal control which also includes risk assessment, control activities, information and communication as well as follow-up. Mentioned components are described further below.
CONTROL ENVIRONMENT
The board of directors bears the overall responsibility for internal control of financial reporting. To create and maintain a functioning control environment, the board of directors has adopted a number of policies and governing documents that regulate the financial reporting. These mainly comprise the rules of procedure for the board of directors, the instructions for the CEO, instructions for committees set up by the board of directors and instructions for financial reporting. The board of directors has also set up an authorisation order and a financial policy. Flerie also has a manual on financial matters, which includes principles, guidelines, and procedure descriptions for accounting and financial reporting. The board of directors has furthermore set up an audit committee which main task is to monitor the Flerie’s financial reporting, the efficiency in the Flerie’s internal control, internal auditing (if such a function is established in the future) and risk management, as well as to review and monitor the auditor’s impartiality and independence. The responsibility of the day-to-day work of maintaining the control environment rests primarily with the Flerie’s CFO who reports to the board of directors regularly in accordance with established instructions.
In addition to the internal monitoring and reporting, the Flerie’s external auditors report to the CEO and the board of directors during the financial year. The auditors’ reporting keeps the board of directors informed of reliable documentation for the financial reporting in the annual report.
RISK ASSESSMENT AND CONTROL ACTIVITIES
The risk assessment work includes identifying and evaluating the risk of significant errors in the Flerie’s operational process, which includes accounting and reporting at group and subsidiary level. Risk assessment is carried out on an ongoing basis and in accordance with established guidelines focusing on the Flerie’s significant business processes. Within the board of directors, the audit committee has the primary responsibility to continuously evaluate the Company’s risk situation, after which the board of directors makes an annual review of the risk situation.