The Audit Committee, on behalf of the Board, monitors the integrity of the financial statements, compliance with legal and regulatory requirements and the effectiveness of our systems of internal control over financial reporting.

The Audit committee is primarily responsible for reviewing annual and interim financial reports, overseeing the external audit process, including audit fees and the internal audit function, and resolving matters arising during the course of reviews and audits.

This involves:

• reviewing, with management and the external auditors, the audited financial statements including conformity with generally accepted accounting principles;
• reviewing, with management, the reasonableness of significant estimates and judgments made in preparing the financial statements, as well as the quality of the disclosures in the financial statements;
• reviewing matters arising from reviews and audits performed.

The Audit Committee itself does not perform audit work. Ericsson has an internal audit function, which reports to the Audit Committee and performs independent audits.

Alleged violations are investigated by Ericsson’s internal audit function in conjunction with the relevant Group Function. Information regarding any incidents, including measures taken, details of the responsible Group Function and the status of any investigation are reported to the Audit Committee.

The Audit Committee consists of four members appointed by the Board from among its members. Members of the Committee must be independent from the operational management, financially literate and familiar with the accounting practices of an international company comparable to Ericsson. At least one member must be an audit committee financial expert.

Current members of the Audit Committee are Ulf J. Johansson (Chairman of the Committee), Roxanne S. Austin, Sir Peter L. Bonfield and Jan Hedlund. The Board of Directors has determined that each of Ulf J. Johansson, Roxanne S. Austin and Sir Peter L. Bonfield satisfy the requirement regarding financial expertise.

The Audit Committee has appointed an external expert advisor, Mr. Peter Markborn, to assist and advise the Committee.

The Audit Committee held nine meetings in 2008 – attendance is reflected in the table “Directors’ Attendance 2008”. During the year, the Audit Committee reviewed the scope and results of external financial audits, the independence of the external auditors and monitored the external audit fees. In addition, certain services other than audits performed by the external auditors were approved by the Audit Committee under its pre-approval policies and procedures. The Audit Committee approved the annual audit plan for the internal audit function and reviewed its reports. The Audit Committee also reviewed and discussed with the external auditors each interim report prior to publishing. In addition, the Audit Committee monitored the continued compliance with the Sarbanes-Oxley Act and the internal control and risk management process. The Audit Committee also approved certain related-party transactions in accordance with its pre-approval process.

The Audit Committee makes recommendations to the Board of Directors regarding the auditors' performance and fees. It reviews the scope and execution of audits performed (external and internal) and analyzes the result and the cost.

The Audit Committee has established pre-approval policies and procedures for services other than audits performed by the external auditors. Such services fall into two broad headings:

General Pre-Approval services that can be pre-approved by the Audit Committee without consideration to specific case-bycase service. Tax, transaction, risk management, corporate finance, attestation and accounting services and general services have received a general pre-approval of the Audit Committee, provided that the estimated fee level for the project does not exceed SEK 1 million. The external auditors must advise the Audit Committee of services rendered under the general preapproval policy.

Specific Pre-Approval – all other audit-related, tax and other services must receive specific pre-approval. the Audit Committee Chairman has the delegated authority for specific preapproval, providing service fees do not exceed SEK 2.5 million. The chairman reports any pre-approval decisions to the Audit Committee at its scheduled meetings. For other matters, an auditor submits an application to the CFO. If supported by the CFO, the application is presented to the Audit Committee for final approval.

Pre-approval authority may not be delegated to management. The policies and procedures include a list of prohibited services.