Control activities are designed to prevent, identify and correct errors and deviations in the financial reporting.
Husqvarna Group has defined internal control standards, i.e. specifications of the control activities that must be included in each business process in order to ensure and maintain a uniform level of internal control over financial reporting within the Group. Control activities are integrated in processes for accounting and financial reporting, and include routines for authorization and signing for the company, reconciliation of bank balances and accounts, analysis of results, segregation of duties, automatic controls integrated in IT-systems, and control of the basic IT environment. The Group maintains the following control processes for financial reporting:
Each operative unit has a controller whose responsibilities include ensuring that the unit’s internal controls comply with Group standards, as well as compliance with Group guidelines and principles as stated in Husqvarna’s Accounting Manual. The controller is also responsible for ensuring that financial information is correct and complete and is delivered on time. In addition, controllers at business unit and Group level have corresponding responsibilities.
A Country Officer is appointed by Husqvarna Group in each country where the Group operates subsidiaries. The Officer’s duties include safeguarding the interests of the Group’s owners as well as identifying and reporting risks in such areas as fiscal regulations and other legislation.
Letter of representation
Husqvarna Group has a procedure for the confirmation of the final accounts, according to which each company head and the controllers for various reporting units sign a letter of representation confirming that the financial report package presents a true and accurate picture of the units financial position and has been prepared in accordance with the Group’s accounting standards.
The monthly meetings of Group Management include a review of the monthly results for the Group and for operative units, as well as updated forecasts, plans and strategic issues.
Each reporting operative unit submits an annual Control Self-Assessment regarding the status of its area of responsibility that is subject to internal control. The Self-Assessment report is signed by the controller. The assessment is based on a comprehensive questionnaire designed to measure the extent of compliance with defined requirements. The unit measures its own compliance. The results of Self-Assessment are collated at Group level for evaluation of control routines, and are submitted to the Audit Committee.
Routines related to acquisitions
Husqvarna has established guidelines and routines designed to ensure that acquisitions of operations are accurately analyzed in terms of financial, operational and environmental consequences. Acquisitions are evaluated at 12- and 24-month intervals following the transaction. Evaluations are reported to the Audit Committee and the Board.