Internal control over financial reporting is based on the overall control environment. This involves clear definitions of organizational structure, decision-making paths and authority, which are communicated in the form of internal control documents such as policies, instructions and guidelines. The control environment also includes laws and other external regulations.
The Board of Directors is ultimately responsible for internal control over financial reporting. Efficient performance by the Board is thus the basis for satisfactory internal control. The Board has established rules of procedure and clear instructions for its work, which also include the activities of the Audit and Remuneration Committees.
The overall duty of the Audit Committee is to support the Board’s supervision of the auditing and reporting processes, and to ensure the quality of such reports and processes.
Responsibility for maintaining an effective control environment as well as the ongoing work on risk management and internal control over financial reporting is delegated to the President and CEO. This responsibility is in turn delegated to managers within their specific areas at various levels in the Company.
Responsibility and authority are defined in instructions to the President and CEO, regarding the right to sign for the Company, manuals, various policies, routines and codes. The Board approves certain Group policies and the Code of Conduct.
Group Management approves other policies and instructions, and divisions and Group staff functions issue guidelines and monitor implementation of all policies and instructions.
Group rules for accounting and reporting are stipulated in the accounting manual available to all personnel in finance and accounting.
Internal control documents are reviewed and updated regularly with reference to e.g. changes in legislation, accounting standards, procedures and listing requirements.