Sweden

The idea of group accounting was introduced in Sweden at the beginning of the 1930s both in practice, although to a limited extent, and as a subject for discussion in circles interested in the development of financial accounting. A major event which sparked off these ideas occurred in 1932. Ivar Kreuger was the leading industrialist in Sweden at the time who also had a remarkable reputation among financial institutions abroad. He had, for instance, restructured much of the match industry of the world as well as shaping the Swedish Match Company and its subsidiaries. Another of his core companies, Kreuger & Toll, was a construction company. His empire came under heavy financial stress around 1930 and Kreuger took his life. Afterwards, it became apparent that he had used transfers between his companies to conceal the true financial position of the group. Shareholders and creditors alike lost money. Politicians, journalists and ordinary people reacted emotionally and legal action was taken, in particular against a leading bank manager close to Kreuger. The manager was convicted; although whether this was the right verdict has since been disputed (af Trolle, 1992).