What is auditing?

An audit is an examination and verification of a company’s financial and accounting records and supporting documents by a professional, such as a Certified Public Accountant.

Who needs auditing and in Switzerland?

Auditing is not required for sole proprietorships and partnerships. Compulsory auditing depends on the activities, financial accounts and total employees of the company. Enterprises need auditing if a) they are required to prepare consolidated financial statements (as outlined in the company types), b) they are listed on the stock exchange and c) exceed at least two of the following criteria in two successive financial years:

• Total Asset CHF 10 million

• Total Turnover CHF 20 million

• Average of 50 employees over the year.

Companies that are not subject to full audit according to Art 727 OR are however subject to limited audit. These companies (usually small entities) can choose for opting out (no auditing) if they have a workforce that consists of less than 10 full-time employees.

What are the audit processes in this country?

Larger companies in Switzerland are required to conduct a ‘standard audit’ and smaller sized companies need to conduct a ‘limited audit’. Those who are subject to a ‘standard audit’ have to establish an internal control system (ICS). Besides this, auditors are required to provide Board of Directors of the company with a comprehensive report. Irrespective of which audit type used, all companies that need auditing are required to report on their risk management procedures.

Please click here for a list of auditing companies in Switzerland provided by the Swiss Financial Market Supervisory Authority (FINMA).

Useful links

• Doing Business in Switzerland

• Financial Reporting law in Switzerland (Art. 727 can be found on page 18)

• Auditing in Switzerland