With Finland facing ongoing fiscal pressures and an evolving regulatory landscape, companies will also be put to the test. Their finance teams must navigate the increasingly complex financial close requirements, shaped by both national legislation and European Union regulations. At the same time, it's their job to ensure compliance and maintain stakeholder confidence.
Recent data from Statista reveals that 41% of Finnish account holders expressed concerns about their financial future in late 2024. This highlights the growing importance of transparent and reliable financial processes in the country.
We'll use this blog to explore Finland's financial close requirements and the regulatory environment shaping them.
The Regulatory Framework of Financial Close in Finland
In general, Finland's financial close requirements are anchored in a tough legal and regulatory framework that aligns closely with the European Union's directives and regulations.
Accounting Standards and Legal Framework
Finland's primary legislation governing accounting and financial reporting is the Accounting Act No. 1620/2015. This act requires the preparation of financial statements based on the entity's size and nature. It is done in accordance with either:
- The Finnish Generally Accepted Accounting Principles (Finnish GAAP)
- The EU-endorsed International Financial Reporting Standards (IFRS)
Listed companies, credit institutions, insurance firms and other public interest entities are required to prepare consolidated financial statements using IFRS. This reflects the need for greater transparency and comparability on an international scale.
Meanwhile, other companies generally follow the Finnish GAAP, unless they meet specific criteria that make IFRS adoption mandatory. The rules are more flexible for smaller companies, as they are allowed to use simplified reporting and abridged financial statements.
Audit and Disclosure Obligations
The Auditing Act (1141/2015) mandates annual audits for most companies, with exceptions for the smallest entities. Audits must follow International Standards on Auditing (ISA), as adopted by the European Commission. Companies must prepare their financial statements and management reports in Finnish or Swedish and denominate them in euros.
The financial statements are filed with the Trade Register within four months after the reporting period ends, ensuring public access and regulatory oversight. This dual framework of accounting and auditing standards is the reason that financial close processes in Finland are transparent, accurate and compliant with both national and EU requirements.
Banking and Financial Sector Regulation
To align with the EU directives, Finland's banking sector is governed by a suite of legislation. This includes the Act on Credit Institutions (610/2014) and the Capital Requirements Regulation (CRR).
In the meantime, the role of the Finnish Financial Supervisory Authority (FIN-FSA) is to oversee compliance and focus on the stability of credit institutions and the broader financial system. It is a way to ensure that banks and financial firms adhere to strict reporting and capital requirements, reinforcing the integrity of the financial close process.
Challenges Finnish Companies Face in Financial Close
Despite the clear regulatory framework, Finnish companies encounter several challenges during financial close:
- Transitioning between Finnish GAAP and IFRS can be complex, especially for companies expanding internationally or listed on regulated markets.
- Enhanced transparency requirements increase the workload and risk of errors during close.
- The pressure to close books quickly while maintaining accuracy is a common challenge, worsened by the need to respond to evolving regulations.
- With almost half of Finnish account holders worried about their financial futures, businesses must ensure their financial reporting is reliable to maintain stakeholder trust
The Finnish Drive for Financial Literacy
Finland has set an ambitious goal: to achieve the world's best financial literacy by 2030. This national strategy, led by the Bank of Finland, aims to equip citizens and businesses with the knowledge and skills needed to make sound financial decisions. High financial literacy supports better compliance, risk management, and ultimately, a smoother financial close process for companies operating in Finland.
How Aico Supports Finnish Businesses in Financial Close
Aico's intelligent automation solutions are designed to address the unique challenges of financial close in Finland. Aico helps to automate routine tasks, such as data collection, validation, and reconciliation. This will help companies reduce errors, accelerate closing timelines and maintain compliance with both Finnish and EU regulations.
Key benefits of using Aico's financial close automation in Finland include:
- Efficiency Gains: Automation reduces manual workload, freeing finance teams to focus on analysis and decision-making.
- Improved Accuracy: Automated controls and validations minimise the risk of errors and omissions.
- Enhanced Compliance: Aico's solutions are designed to align with Finnish accounting laws and auditing standards, ensuring regulatory adherence.
- Scalability: Whether a small enterprise or a large public interest entity, Aico's tools adapt to varying reporting complexities and volumes.
- Local Support: With operations in Europe, including Finland, Aico provides tailored support and expertise to meet local market needs.
The Future of Financial Close in Finland
As Finland continues to align with EU fiscal policies and adapt to global financial reporting trends, companies must remain agile in their financial close practices. The government's commitment to fiscal consolidation and structural reforms, as outlined in the 2025–2028 Medium-Term Plan, places even greater emphasis on robust financial management systems.
At the same time, the national focus on financial literacy promises to raise the bar for both individuals and organisations. Companies that embrace intelligent automation, such as Aico's solutions, will be better positioned to meet these demands efficiently and accurately.
Aico's intelligent automation solutions, available locally in Finland, offer a practical path to greater efficiency, accuracy, and compliance. For Finnish businesses looking to optimise their financial close process, partnering with Aico offers a clear path to meeting all regulatory demands with agility and precision.
Are you ready to embrace the future of optimising the books and financial closing and all the tasks in between?