Kirjanpitolain

Kirjanpitolaki, commonly referred to in English as the Accounting Act, is the Finnish statute that governs bookkeeping and financial reporting for entities operating in Finland. It sets the baseline requirements for maintaining accounting records, preparing financial statements, and ensuring that accounts present a true and fair view of financial position and results. The act operates alongside other corporate, tax, and EU accounting directives.

Scope and obligations: The act applies to a wide range of entities, including corporations, partnerships, and sole traders that keep official books. It requires records to be kept in a reliable and verifiable form, generally on an accrual basis, and to be retained for the statutory period. Accounting must typically be conducted in Finnish or Swedish, and must enable the preparation of annual accounts and related disclosures. The act also covers the documentation of accounting policies and the organization of the bookkeeping function.

Financial statements and auditors: Entities must prepare annual financial statements, and larger entities may prepare consolidated financial statements. These statements usually include a balance sheet, income statement, and notes with accounting policies. For many entities, a statutory auditor’s report is required; some small entities may be exempt or subject to simplified procedures under related regulations.

Enforcement and penalties: The Accounting Act provides remedies and penalties for improper or incomplete bookkeeping and for misleading financial reporting. Sanctions can include corrections, fines, or more serious consequences in cases of deliberate fraud or substantial non-compliance, with oversight and enforcement carried out by relevant authorities under Finnish law.

Relation to other laws: The act complements the Companies Act, tax legislation, and EU accounting directives, and is periodically amended to reflect governance standards and international accounting developments.