Public Business Support and Funding

TABLE OF CONTENTS PREVIOUS CHAPTER STARTING UP A BUSINESS IN FINLAND NEXT CHAPTER ACCOUNTING AND FINANCIAL TRANSACTIONS One of the most important tasks for any company is man- aging the bookkeeping process. Accounting means record- ing the sums of money involved in business transactions resulting from business operations. Accounting collects complete financial documentation and registers informa- tion on business transactions, following a specific meth- od. The result is financial statements on the company's finances. Accounting comprises the company's revenue, expenses, property, assets, and debts. Financial state- ments prepared based on accounting reveal the operating result. Company management is responsible for establish- ing and managing accounting. Finnish accounting act and financial statements According to the Accounting Act, all enterprises and pri- vate persons engaged in business or professional activi- ty are subject to an accounting obligation. The obligation commences from setting up a business. Accounting ar- rangements are therefore among the primary duties of a new company. Companies in Finland often require the outside expert help for accounting tasks and outsourcing is very com- mon. Companies have monthly, quarterly, and annual no- tification obligations to authorities. In addition, employer companies submit information on paid wages to their em- ployment pension and accident insurance companies and apply for reimbursement for their occupational healthcare expenses. Audit According to the Auditing Act a company must elect an auditor and carry out an audit of the accounts. Auditing forms a part of the business control system. It is therefore advantageous to take advantage of the services of a pro- fessional auditor to ensure that the financial statements and possible annual report provide correct, sufficient and consistent information. Auditors check the accounts of the company at least once a year. According to the Auditing Act, a company need not ap- point an auditor if certain conditions are met. Private en- trepreneurs (i.e., those working under a business name) are not required to appoint an auditor. Small companies (limited companies, general partnerships, limited part- nerships, cooperatives) are exempted from auditing. An auditor must be appointed if the company meets two of the following criteria: • • • Balance sheet total exceeds 100 000 euros. Net sales or corresponding earnings exceed 200 000 euros. There are more than three employees on average. The limits apply to both the concluded and the preced- ing accounting period. If the articles of association, part- nership agreement or rules of the organization include a provision on appointing an auditor, an auditor must be appointed (or the relevant provision in the articles of as- sociation must be changed). Auditors should be qualified and authorized. Auditors for large enterprises and companies listed on the stock ex- change should possess additional qualifications. The Trade 18

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