The different financial management units subordinate to OP Financial Group’s CFO take charge of not only the preparation of interim reports, half-year financial reports, financial statements bulletins and annual financial statements for OP Financial Group and Group entities, as required by financial accounting, but also of the production of management accounting reports, such as monthly reports on business performance. The Business Control function within OP Financial Group also produces earnings forecasts, analyses the actual outcome in comparison with the forecasts, and reports on any deviations.
Group-level financial information correctly consolidated using sub-ledger accounting and OP Financial Group companies’ information forms the basis of reliable financial reporting.
OP Financial Group uses Group-wide financial reporting and risk reporting to monitor the achievement of its business goals and financial targets, and these reports are regularly reviewed at executive management and OP Cooperative’s Board of Directors meetings. Financial information in financial reports is compared with related plans and any differences are analysed, and the report also describes the earnings outlook for the current year and for a longer period of time. The monthly financial performance and risk reports for the management are prepared according to the same principles. When preparing and examining the report, the management ascertains the accuracy and correctness of the financial results and reporting by analysing the performance and risk exposure and any deviations from targets.
External reporting is based, for example, on the International Financial Reporting Standards, the Finnish Limited Liability Companies Act, the Act on Credit Institutions, the Insurance Companies Act, the Accounting Act, and the standards and regulations issued by the Financial Supervisory Authority. OP Financial Group’s shared principles are applied in the accounting, financial statements and consolidated financial statements of OP Financial Group companies. Responsibility for the interpretation of, guidelines on and advice on standards, other laws governing the preparation of financial statements and official accounting requirements as well as the preparation of and compliance with common accounting policies rests with OP Cooperative, OP Financial Group’s central cooperative. Whenever necessary, the company turns to auditors who give a statement of the selected principles and interpretations.
Organisation of financial reporting
OP Cooperative’s Board of Directors is the highest decision-making body in matters associated with business control. The Board of Directors must ensure that supervision of accounting and treasury is duly organised. It decides on reporting, procedures and qualitative and quantitative indicators used to assess operational efficiency and performance. The Board of Directors discusses and approves the consolidated financial statements and interim reports (including half-year financial reports and financial statements bulletins).
The Audit Committee of the Board of Directors is tasked with assisting the Board of Directors to ensure, firstly, that the central cooperative consolidated and OP Financial Group have in place an adequate and well-functioning internal control system to cover all operations and, secondly, that accounting and treasury control is organised appropriately in the central cooperative consolidated and in OP Cooperative. To perform its tasks, the Committee discusses the Group’s accounting policies and capital adequacy assessment principles to be submitted to the Board of Directors for adoption. It also supervises for its part financial reporting by
- assessing the Group’s financial statements and interim reports (including half-year financial reports and financial statements bulletins) and the financial statements of the central cooperative consolidated
- assessing the Corporate Governance Statement issued annually
- assessing significant or exceptional transactions and the related management judgement
- monitoring the financial statements process, supervising the financial reporting process, and
- assessing the accuracy of financial reporting and its conformity with regulations.
The CEO must ensure, in accordance with the Co-operatives Act, that the company’s accounting is in compliance with applicable laws and that treasury has been organised in a reliable manner. The OP Cooperative Finance and Group Treasury function is in charge of OP Financial Group’s financial reporting.
The Group has centralised the preparation of financial statements and interim reports (including half-year financial reports and financial statements bulletins) so that they are prepared independently of business lines/divisions. OP Financial Group’s shared systems are primarily used in reporting. Operational duties related to financial and management accounting have also been centralised at central cooperative consolidated level.
Independent assessment of financial reporting
As provided by law, auditors shall assess the accuracy of financial reporting. The auditors are tasked with auditing the accounting, financial statements and governance of the company and its consolidation group in order to obtain assurance that the financial statements have been prepared in compliance with the rules and regulations in force and give owners and other stakeholders a true and fair view of the financial position of the company and its consolidation group and its financial performance and cash flows.
In its process audits, Internal Audit also assesses, when applicable, the effectiveness and adequacy of financial reporting, and reports these audits to the executive management and the Board of Directors’ Audit Committee.
As part of the independent financial reporting assessment, auditors supplement the actual audit by inspecting the planning and effectiveness of controls within centralised functions according to ISAE 3402. Auditors report separately on this specific audit in accordance with this standard.