The Swedish Parliament has amended local laws to bring into effect requirements of the EU Eighth Company Law Directive.
It is now mandatory for listed companies to have an audit committee.
Helene Agelii from Swedish professional services institute FAR SRS told The Accountant the implementation of audit committees adds more responsibilities for external auditors. They must now report to the audit committees, particularly regarding issues such as internal control. Also, if an auditor finds themselves in a situation where their impartiality and independence could be questioned, they must discuss it with the audit committee.
Agelii said many Swedish listed companies already have audit committees. The significant change is the requirement that the audit committee oversees the auditor.
“We think it sounds a little strange. In our opinion it is the auditor that oversees the board and not the other way around” she said.
Other amendments to Swedish law that will become effective in July introduce requirements regarding transparency reports, auditor rotation and quality reviews.
Agelii does not expect these changes to have much impact on the Swedish profession.
FAR SRS has welcomed the fact that the amendments follow the basic EC requirements and do not add more administrative burdens.