Published 4 September 2024 at 14.35
Domestic. By forcing Sweden's 1.8 million companies to pay a private contractor to complete their annual report in a web form, the government hoped to fatten a small number of private actors. But players in the fledgling forms industry are misbehaving, and digital annual reports are now riddled with twice as many errors as the previous paper annual reports, an audit shows.
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It is the entrepreneur Jens Nylander, best known for his mp3 player Jens of Sweden in the early 2000s, who reviewed the reform with digital annual reports.
Digital annual reports were introduced a few years ago in Sweden, but unlike in other countries, the Swedish Companies Registration Office did not produce its own web form where the information in the annual report was filled in and submitted to the authority. Such a form exists in many countries and automatically checks the annual report for errors and omissions.
But in Sweden they did it differently and tried to benefit the IT industry by outsourcing the «operation» and «development» of the simple web form. Sweden's 1.8 million companies would then have the opportunity to choose a private executor and pay a fee to fill in a web form where the annual report is entered.
However, the private intermediary creates a lot of problems because the forms are substandard and do not check even for very basic errors and deficiencies, such as the balance sheet not balancing.
At the same time, the digital submission allows you to submit an annual report on a few minutes without knowing what you are really doing. The Swedish Companies Registration Office's system, in turn, swallows the entered data without complaining, as the authority relies on the private providers to check that Swedish annual reports are correct, despite the fact that no such check takes place.
The privatized web forms were supposed to fatten the Swedish IT industry and companies such as SPCS, Hogia and others, but have now instead embarrassed the industry because digital annual reports contain twice as many errors as the old paper reports.
Many have turned to the Swedish Companies Registration Office and complained about the obligation to pay a private company to be able to fill in a form that could be filled in on the Swedish Companies Registration Office's website. On the website, the authority is open that the private form is not needed and that it is about promoting the competitiveness of the Swedish IT industry. Under the heading «Why do I have to have a software?» answers the Swedish Companies Registration Office in its FAQ:
«When we were commissioned by the government to develop the e-service, it included creating a solution where companies could simultaneously develop software. In this way, we have, among other things, contributed to create space for increased innovation, competitiveness and economic growth among companies. We create the conditions and the market provides functionality.»
However, the market did not provide the necessary functionality, at least not for error control. According to a longer article in Jens Nylander's blog, neither the Swedish Companies Registration Office's XML interpreter nor the executor's software detect simple errors such as the date being wrong, the balance sheet not balancing or the reporting of mandatory items such as liabilities and equity being completely missing.
In total, the number of deficiencies for 2024 in digital annual reports amounts to approximately 105,000 for the 300,000 annual reports submitted, according to Jens Nylander's review.