For the proper growth of the company, you must regularly review the workings of your company. This means evaluating and analyzing all your account books and anything that could affect the development of your company. This complete procedure is known as an audit, and it helps the management in understanding the workings of the company and taking any remedial measures if required.
With its favorable taxation system, strong government, and a low burden of tax on individuals as well as other legal entities, Switzerland is one of the most attractive places for entrepreneurs all over the world. However, keeping the accurate accounts can be overwhelming, and that’s where the requirement of audit services in Switzerland comes in. Let’s learn about it in detail.
What are Audit Services in Switzerland?
To understand audit services in Switzerland, we must first understand what auditing is. Auditing is the process of examining a company’s transactional records and account books to rectify any activities that may be deemed as fraudulent by the authorities. There are standard audit procedures that a company must follow when conducting an audit. The company first needs to perform an internal audit before hiring an external third party.
The result of this audit process will be an audit report containing the auditors' findings. This report helps form the financial picture of the company and helps to make significant decisions accordingly. The audit report will also help the investor decide whether to invest in the company by providing all the necessary details in a single place.
In Switzerland, audit services are provided in accordance with the Swiss Code of Obligations (CO) and are tailored to companies of different sizes and structures. Audit services in Switzerland include ordinary audits, limited audits, and exempt audits for qualifying small companies. Auditors in Switzerland evaluate not only the financial statements but also the company's internal controls, regulatory compliance, and risk management practices, ensuring that stakeholders receive a reliable and accurate view of the company’s financial health.
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According to the Swiss Code of Obligation, three types of audits can be performed on a company. These are as follows:
Ordinary Audit
Article 727 of the Swiss Code of Obligations states that sole proprietorships and partnerships (including limited partnerships) are not obligated to call an external auditor. Moreover, other companies are subject to an ordinary audit once they exceed the following specified limit for two consecutive financial years:
Total Balance Sheet: CHF 20 Million
Revenue: CHF 40 Million
Number of Employees: 250
Advantages of a Regular Audit
The regular audit will provide a concise report of the complete finances of the company.
The audit process would be thorough and time-intensive, enabling a clear and sensible audit report.
Limited Audit
Under Article 727a of the Swiss Code of Obligations, if a company does not meet the requirements for an ordinary audit, it must undergo a limited audit by the external auditor.
Advantages of a Limited Audit
Lower costs compared to an ordinary audit
Faster execution because of its shorter duration
Makes the firm legally compliant
Enhance trust among the shareholders
Exempt Audit
As per Article 727a of the Swiss Code of Obligations, any company with 10 or fewer full-time employees can opt out of any audit process.
Audit Type
Who it Applies To
Scope of Review
Ordinary Audit
Large companies (≥2 of 3 thresholds: CHF 20m assets, CHF 40m revenue, 250 employees), public companies, banks, and insurers
Full audit: financial statements, internal controls, compliance, risk management
Limited Audit
Smaller companies not meeting thresholds
Plausibility check of financial statements only; no deep internal control or risk review
Exempt Audit
Very small companies (<10 employees, unanimous shareholder approval)
No audit required
Audit Filing Requirements
To get started with audit services in Switzerland, your firm must meet specific audit filing requirements.
An ordinary audit is mandatory for companies that exceed two of the following thresholds in two consecutive years:
A balance sheet total of 20 million francs.
Sales revenue of 40 million francs.
250 full-time positions on an annual average.
Aside from that, for limited audits:
Companies must appoint an external auditor.
The auditor must be independent and must form its audit opinion objectively.
How to Avail Audit Services in Switzerland?
You can avail audit services in Switzerland by following the steps below:
Determine Audit Requirement
To avail the audit service, check if your company needs a full, limited, or exempt audit based on size and legal form.
Hire a Licensed Auditor
Choose an independent audit firm registered with the Swiss Federal Audit Oversight Authority.
Prepare Financial Records
Ensure all accounting books, records, and transactions are complete and accurate.
Get Started with the Audit Service in Switzerland
The auditor examines financial statements, internal controls, and relevant documents.
Receive Audit Report
Get the audit report once it is complete.
Whether you are starting a small business in Switzerland or a company in Switzerland, appointing these services paves the way for a successful auditing experience and ensures your firm meets the legal requirements as well. Moreover, we at Business Setup Worldwide will provide you with the audit service and helpful advice on how to grow your business. We also offer a wide range of services to help elevate your company to new heights. To know more about us or our services, do contact us; we would be delighted to help you.
Frequently Asked Questions
1. What is the purpose of an audit in Switzerland?
An audit ensures that a company’s financial statements are accurate, comply with regulations, and are free of material misstatements, providing transparency to shareholders and stakeholders.
2. Who needs to undergo an audit in Switzerland?
Companies exceeding certain size thresholds under the Swiss Code of Obligations must undergo either a full or a limited audit. Small companies may qualify for an audit waiver.
3. What types of audits are available in Switzerland?
There are three main types: ordinary audit, limited audit, and exempt audit.
4. How long does an audit typically take?
The duration depends on the company size, complexity of operations, and preparedness. However, audits usually take several weeks to a few months from planning to the issuance of a report.
5. What is included in an audit report?
The audit report contains the auditor’s opinion on financial statements, findings on internal controls, compliance with accounting standards, and any recommendations for improvement.
