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December 13, 2009

Sweden prepares for momentous changes to accounting landscape

Preparations for a substantial change to Sweden’s accounting landscape in 2010 have dominated the past 12 months for local professional services body FAR SRS.

FAR SRS secretary general Dan Brännström told The Accountant that Sweden’s government intends to remove mandatory audit for SMEs and apply the highest audit threshold allowed by EU law.

The threshold will be net sales of SEK83 million ($13.2 million), total assets of SEK41.5 million and 50 employees.

Companies that exceed one of the thresholds will be exempt from statutory audit. If two or more are exceeded they must still be audited.

The exemptions are not likely to become effective until 1 July 2010 as the government is yet to finalise its position.

Preparations FAR SRS has made for the changes include developing a new standard for compilation services, as an alternative to audit, and developing an auditor’s toolkit highlighting new services for firms to focus on.

FAS SRS also broadened its membership categories, which Brännström said strengthened the institute and enabled it to develop these new services.

“We used to be a rather traditional institute for auditors, but we now welcome all professionals within the accounting business including tax consultants, accounting consultants and business advisers,” Brännström said.

“I do not think it would have been possible to [develop the new compilation standard] if we didn’t have both auditors and accounting consultants within the institute.”

The relevance of the auditor’s report is also the subject of debate in Sweden at present, Brännström said.

The International Organization of Securities Commission’s technical committee recently issued a consultation paper regarding auditor’s communication, which Brännström said the institute will respond to.

“It is important the word from an auditor is concluded in a clear and relevant way for the stakeholders so I think this consultation paper is very important for the future relevance of audit,” he said.

“It is important for the audit business to remain relevant and if we want to remain relevant then the stakeholders must feel that they get value from the report.”

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