Internal Control
According to the Swedish Companies Act, the Board is responsible for internal control. The aim of internal control is to create a clear structure of responsibility and an effective decision-making process. The Board has defined a number of basic documents of importance for financial reporting in order to guarantee an effective control environment. The Board’s rules of procedure and the instructions for the Managing Director serve to guarantee a clear allocation of roles and responsibilities, with the aim of operational risks being managed effectively. The Board has also drawn up a number of basic guidelines and policies that are important for internal control, such as a financial policy, instructions for accounting and reporting, a code of conduct and a communications policy. The basic control documents are subject to review on an ongoing basis. An effective control environment also requires an adequate organisational structure and ongoing reviews of this. Company management reports to the Board on a regular basis following defined routines. Company management is responsible for the system of internal controls that is required to deal with significant risks in operating activities. Managers at various levels within the Group have clearly defined authority and responsibilities with regard to internal control.
Control Environment
The foundations of the internal control in relation to the financial reporting consist of the general control environment with organisation, decision-making paths, authority and responsibilities that have been documented and communicated. Within New Wave Group some of the most important constituent parts of the control environment are documented in the form of policies, e.g. IT policy, financial policy, environmental policy and instructions, such as authorisation instructions and a reporting manual.
Control Activities
In order to ensure the internal control works, there are both automatic controls in e.g. IT-based systems, which handle authority and authorisation rights, and also manual controls in the form of e.g. reconciliations and physical counts. Detailed economic analyses of the result plus follow-up of plans and forecasts supplement the controls and provide a general confirmation of the quality of the reporting.
The Group performs regular reviews of the companies’ routines and accounting methods, which are reported to Group management. No MDs are permitted to appoint or dismiss a finance manager, and finance managers report directly to the Group’s CFO. The Group’s risks with regard to financial reporting lie in the risk that material misstatements may occur when reporting the company’s status and financial results. The company’s accounting instructions and manuals, together with established follow-up routines, serve to minimise these risks.
Information and Communication
The most important control documents in the form of policies and instructions are updated regularly and communicated via relevant channels electronically and/or in printed form. For communication with external parties, there is an information policy which specifies guidelines for how this communication should take place. The purpose of the policy is to ensure that all information obligations are fulfilled correctly and in full.
Follow-up
Finance personnel and management at company and Group level analyse the financial reporting in detail every month. The Group’s central support staff are responsible for implementing, further developing and maintaining the Group’s control routines, and for performing internal controls of business-critical matters. New Wave Group’s privatised structure involves a comprehensive controller-based organisation, which is responsible for ensuring that financial reporting from each unit is correct, complete and on time.
New Wave Group has introduced a control system to verify the various processes and to guarantee financial reporting. The controls in respect of the various processes and risk elements are evaluated by means of self-assessment, internal audits, internal Board meetings and via the company’s external auditors. Most processes are fully or partly centralised at Group level, such as purchasing, logistics, payments, financing, IT, the consolidation and compilation of Group reports. The Board receives financial reports on an ongoing basis, and at each Board meeting they discuss the financial situation facing the Group and the various companies. During the year the Board has also received reports from the company’s auditors detailing their observations.
