Financial and reporting requirements of all business entities are governed by the Accounting Act of 1976. Limited liability companies must also comply with the Companies Act of 1975 (ABL) and large partnerships with the Law regarding annual accounts in certain companies of 1980. The standards set by these laws are based on generally accepted accounting principles. The Accounting Act requires financial statements to be prepared at the end of each financial year, and the Companies Act and the Law regarding annual accounts in certain companies require that financial statements of every limited liability company and large partnerships be audited.

Because the accounting provisions of these two laws are sometimes vague, other authorities assist in interpreting them and contribute to the development of generally accepted accounting principles. The Financial Accounting Standards Council (formed in 1989), the Accounting Board and the Swedish Institute of Authorized Public Accountants are the most prominent among these bodies.

The contents of this article are intended as a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.

For further information contact Per Snellman on Tel: +468 613 9000 0r Fax: +468 791 7511; or enter a text search 'Ernst & Young' and 'Business Monitor'.