Limited Audit: What Companies in Switzerland Need to Know

What is a limited audit?

The limited audit is a legally regulated, simplified form of annual financial audit under the Swiss Code of Obligations (CO). It applies to small and medium-sized enterprises (SMEs) that are not subject to the ordinary audit but are legally required to have their annual financial statements reviewed.

Unlike the ordinary audit, the limited audit involves less depth. The auditor reviews the financial statements with reduced procedures, without extensive system tests or detailed internal control analyses.

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Who must undergo a limited audit?

A limited audit is generally required if:

• the company employs more than 10 full-time positions on average per year
• it is a LLC or PLC where not all shareholders have waived the audit (opting-out)

Opting-out – voluntary waiver of the audit

Companies with fewer than 10 full-time employees may, with unanimous shareholder approval, waive the limited audit.

Opting-in – voluntary audit despite no obligation

A company may also voluntarily choose a limited audit, e.g., to strengthen trust with investors, banks, or business partners.

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Advantages of the limited audit

• Lower costs compared to an ordinary audit
• Less effort for management and accounting
• Faster execution and shorter duration
• Compliance with legal requirements
• Increased trust among stakeholders

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Process of a limited audit

1. Planning: agreement on scope, schedule, and required documents
2. Review of accounts: plausibility check of balance sheet, income statement, and notes
3. Sampling and interviews: limited tests based on samples and management interviews
4. Report: preparation of an audit report stating whether material errors were found

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Differences from the ordinary audit

The limited audit is significantly less expensive and less complex. It is limited to a plausibility check without in-depth reviews of internal controls.

An ordinary audit is mandatory if two of the following three thresholds are exceeded for two consecutive years: balance sheet total CHF 20 million, sales CHF 40 million, or 250 full-time employees.

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Who benefits most from the limited audit?

• SMEs with more than 10 employees
• Young companies wanting to present a professional image
• Startups with investors valuing transparency and security
• PLC or LLC where no unanimous opting-out agreement is possible

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Tips for selecting an auditor

• Ensure registration in the official auditor register (RAB)
• Industry experience for sector-specific risks
• Use of digital processes for efficiency and transparency
• Transparent offers and clear contracts

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Conclusion

The limited audit is a cost-efficient and legally compliant solution for many Swiss companies. It ensures compliance, builds trust, and requires considerably less effort than an ordinary audit.