Internal Control over Financial Reporting

Control environment
Internal control over financial reporting is based on the overall control environment established by the Board and executive management. This includes the culture and values communicated and practiced by the Board. Key components of the control environment are the organisational structure, management philosophy and style, responsibilities and powers that are clearly defined and communicated for all levels in the organisation.

The Board of Sweco has formulated explicit procedural rules and instructions for its own work and that of the Remuneration Committee, Audit Committee and President to facilitate effective management of operating risks. Every year, the Board updates and adopts the procedural rules, instructions for the President, decision-making and signatory powers and a finance policy. Procedural rules for the board and instructions for the president are found in every company in the Group, and are based on the same principles as those for Sweco AB. In addition, Sweco has a number of policies for financial information, corporate communications, IT security, CSR, HR, quality and the environment which create a foundation for good internal control.

Sweco has a signatory and decision-making policy that clearly regulates the allocation of powers and authorities at every level in the company, from the individual consultant to the Board of Directors of Sweco AB. The areas that are covered include price offers, investments, rental and lease agreements, expenditures and guarantees, etc.

Internal control over financial reporting
Internal control over financial reporting is based on the overall control environment established by the Board and executive management.

Risk assessment and control activities
The goal of Sweco’s risk management is to secure the Group’s profit growth and guarantee that Sweco’s operations in the various business units meet their goals. The company’s Board of Directors and executive management are responsible for risk management.

The group-wide risk management project that was conducted during the year led to further development of Sweco’s work on risk management and internal control. A large share of Sweco’s operations consist of projects and work in progress. There is a continued emphasis on further improvement and documentation of control to ensure good internal control with respect to projects and work in progress.

An in-depth risk analysis was carried out in the area of financial reporting. Normative documents, such as a financial accounting manual, were further developed and implemented as a means for ensuring effective management of risks in financial reporting.

Information and communication
Information about Sweco’s normative documents such as group policies, manuals, guidelines and routines is gathered on the Sweco Group’s intranet. Important guidelines, manuals, etc., are continuously updated and communicated to the affected employees. Communication about financial reporting also takes place in connection with controller meetings that are held regularly within the Group. For external communication there is a corporate communications policy that defines the responsibilities and rules for communication with external parties.

Monitoring
Each business area has a controller whose task is to monitor compliance with policies, guidelines and routines. The controllers are also responsible for ensuring the accuracy and completeness of the reported financial information.

The Group’s business system contains a number of functions for financial management, control and monitoring. There is a web-based project reporting system where project managers can continuously monitor their projects and track monthly earnings and key ratios at the group, region, company/division and business area level. Key ratios of relevance for operations can also be followed up weekly at all of these levels. Every month, a group-wide consolidation is carried out to measure actual results against budgets and internal forecasts.

Internal audit
Sweco has a simple and uniform operating structure throughout the Group. Controllers at the Group and business area level regularly monitor compliance with Sweco’s established steering and internal control systems. In addition, the controllers conduct ongoing analyses of the companies’ reporting and financial results in order to oversee their development. In light of the above, the Board of Directors has chosen not to set up a special internal audit function.