The audit of annual accounts in Switzerland
Thursday 17 march 2022
The purpose of the audit
The main purpose of the audit is to check all the balances in the company's accounts to ensure that everything is in order. The accountant can therefore give a definite opinion on the state of the company's assets and liabilities at the end of the financial year.
The audit is carried out in accordance with the legitimate accounting rules of the country in which the company is established. It can also be carried out by the company itself if it has qualified personnel (accounting department, management).
The two types of audit
Companies subject to ordinary auditing are those that meet well-defined criteria. Among other things, they must meet the following criteria:
- They must employ at least 250 full-time staff;
- Have a turnover of CHF 40 million;
- Have a balance sheet total of CHF 20 million.
Legally, when the shareholders of a company represent 10% of its capital, it becomes compulsory to proceed to an ordinary audit: this is the opting - up.
It is up to the company's General Meeting to decide by vote whether or not to carry out an ordinary audit. A full report on the ordinary audit carried out must therefore be submitted to the Board of Directors. Another report, this time a summary report, is also required and should be sent to the General Meeting.
In contrast to the ordinary audit, the limited audit is intended for small and medium-sized companies. It concerns companies that meet the following criteria
- A number of full-time employees ranging from 10 to 249;
- A turnover of less than CHF 40 million;
- A balance sheet of less than CHF 20 million.
The limited audit is limited to the verification of certain analytical aspects only. Depending on the purpose of the audit, further operations may be required. Here, only a short report to the General Assembly is required.
Legally, it is permissible for companies meeting the above criteria not to undergo a limited audit. Furthermore, if the number of employees is less than 10, the company may waive the requirement. This is also the case if all the company's shareholders agree: this is called opting out.
However, such companies are allowed to freely submit to ordinary control instead of restricted control (opting - up). There are also cases of opting-in where companies do not fit into either of these two categories. They can voluntarily undergo a fiduciary audit if they so wish.
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