Accounting Scandals in Sweden – A Long Tradition
Sweden is not typically associated with corporate scandals involving fraud and bribes or with creative accounting. However, this impression of pristine Swedish corporate integrity and reporting transparency is not completely accurate. In the twentieth century, Sweden has experienced several major corporate scandals that have, in varying degrees, involved unethical and illegal behaviours. Other scandals, more broadly speaking, have resulted from misleading or inadequate financial disclosures of complex corporate activities.
In a description of Swedish corporate scandals, perhaps the most obvious place to begin is with the 1930s crash of Ivar Kreuger’s financial empire that is still the most spectacular accounting scandal in Swedish history. (This early Swedish accounting scandal is dealt with in more detail in Chapter 7.) Starting from nothing, Ivar Kreuger created the largest corporate conglomerate in Sweden that included many renowned Swedish corporations such as Ericsson, SKF, SCA and Boliden (Wahlström, 2000). At the height of his success, Kreuger controlled about 400 companies through his acquisition of national monopolies. His International Match Company became the world’s largest match manufacturer.
However, Kreuger’s business empire in the USA and in Europe was a classic pyramid scheme that paid high dividends with funds obtained by the continuous issuance of ...