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 entities. Responsibility for the interpretation of, guidelines on and advice on International Financial Reporting Standards (IFRS), 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 entity 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 OP Financial Group’s financial statements and interim reports (including half-year financial reports and financial statements bulletins).
The statutory and regulatory duty of the Audit Committee of the Board of Directors is to assist the Board of Directors in monitoring and controlling the financial reporting system. To carry out its duties, the Committee supervises the reliability and compliance of the financial statements, other information disclosed on the financial position and governance, and of internal and regulatory reporting related to the financial position by
- discussing OP Financial Group’s financial statements, half-year financial reports and interim reports as well as other information disclosed on OP Financial Group’s financial position, 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
- assessing the appropriateness and efficiency of the processes for preparing financial statements, half-year financial reports and interim reports and the processes for internal and regulatory reporting concerning the financial position as well as the sufficiency and reliability of data used in these processes
- ensuring that financial reporting fulfils sustainability related regulatory requirements
- regularly consulting the Chief Compliance Officer who is responsible for independent compliance
- familiarising itself with audit reports issued by the authorities supervising OP Financial Group and with other reports, and by assessing any measures such reports require
- assessing how OP Financial Group complies with laws, statutes, official regulations and instructions and regulatory requirements
- monitoring regulatory developments
- supervising the management’s response to any shortcomings discovered in the effectiveness of internal control, to non-compliance observations and to recommendations issued by Internal Audit.
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 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 that they 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 senior management and the Audit Committee of the Board of Directors.
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.
OP Financial Group’s financial statements were prepared in accordance with IFRS, applying IASs, IFRSs and SIC and IFRIC interpretations effective on 31 December 2022.
In 2022, OP Financial Group adopted the following standards and interpretations:
- Amendments to IAS 37, IAS 16, IFRS 9 and IFRS 3 took effect on 1 January 2022. The amendments did not have any major effect on OP Financial Group's financial statements.