Revenue recognition
DESCRIPTION
HOW OUR AUDIT ADDRESSED THIS KEY AUDIT MATTER
In our audit, we have evaluated the company's revenue recognition processes. Furthermore, we have reviewed the Group's financial manual and assessedwhether the accounting principles for revenue recognition are in accordancewith applicable accounting standards. We have also performed detailed testing of revenue transactions as well as data analysis to assess revenue recognition. Finally, we have audited the disclosures related to the key audit matter made in the annual report.
Other Information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-25. The remuneration report for the financial year 2021 also constitutes other information. The Board of Directors and the Managing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Net sales for 2021amounted toSEK728.1million in theGroup's statement of comprehensive income. As stated inNoteK1, revenues are recognized inaccordancewith IFRS15where aprinciple-basedfive-step model is applied to identify agreements andany separate performance obligations. Revenue is recognizedwhen the performance commitment under the agreement is fulfilledand the customer has gained control of the service. Revenue is recognizedover time if the customer receives or consumes the benefits at the same time as the service is delivered.When the contractual period is not stated, the average periodof the service delivery is usedbasedonhistorical information. Revenue is valuedat the agreed transactionprice after deductionof any discounts andVAT. We have assessed the recognitionof revenue as a key auditmatter based on the size of revenue in relation toother income statement items, focus fromstakeholders and that the companymakes assumptions through interpretationof agreements, whichaffects the period inwhich revenue recognition takes place. SeeNoteK1 for accountingprinciples regarding revenue recognitionand NoteK3 for the company's descriptionof the year's revenues and the assessmentsmade in connectionwith the year end close.
Directors and the Managing Director are responsible for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Director’s responsibilities and tasks in general, among other things oversee the company’s financial reporting process. Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • ►Identify and assess the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, The Board of
70 · HEMNET GROUP | ANNUAL AND SUSTAINABILITY REPORT 2021
AUDIT REPORT
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