When does my company need an audit?

Your company needs an audit if it exceeds the legal thresholds: balance sheet total above CHF 20 million, revenue above CHF 40 million, or more than 250 full-time positions on annual average.

The audit obligation in Switzerland is clearly regulated in the Code of Obligations. Here is a complete overview of when an audit is required:

Legal thresholds for ordinary audit:

An ordinary audit is mandatory if the company exceeds two of the three following values in two consecutive financial years:

The three thresholds:

• Balance sheet total: CHF 20 million
• Revenue: CHF 40 million
• Full-time positions: 250 on annual average

Additional criteria:

• Public companies: Always subject to audit (publicly traded companies)
• Financial intermediaries: Banks, insurance companies, financial service providers
• Collective investments: Funds and similar structures

Limited audit:

Companies that do not reach the thresholds for an ordinary audit need a limited audit, except if they meet the opt-out requirements.

Who needs a limited audit?

• All Ltd and LLC: That do not fall under ordinary audit
• Cooperatives: With more than 20 members
• Associations: With economic activity exceeding CHF 500,000
• Foundations: According to cantonal law, usually required

Opt-out possibilities (waiver of audit):

Small companies can waive an audit under certain conditions:

Conditions for opt-out:

• Employees: Fewer than 10 full-time positions on annual average
• Unanimous decision: All shareholders/partners must agree
• No public debt: Bonds or similar obligations
• Annual confirmation: Decision must be renewed annually

Exceptions to opt-out:

• Shareholder objection: One shareholder can demand an audit
• Creditor requirements: Banks can impose audit as credit condition
• Supervisory authorities: Can order an audit

Types of audit in detail:

Ordinary audit:

• Scope: Complete verification of annual accounts
• Audit standards: Swiss Auditing Standards (SA)
• Auditor: Licensed auditor or audit firm
• Report: Detailed audit report
• Confirmation: Opinion on annual accounts

Limited audit:

• Scope: Limited audit procedures
• Audit standards: Standard for Limited Audit (SLA)
• Auditor: Licensed auditor
• Report: Brief audit report
• Negative confirmation: "No indication of irregularities"

Industry-specific particularities:

Financial sector:

• Banks: Always ordinary audit + prudential verification
• Insurance companies: Special FINMA audit requirements
• Asset managers: Different requirements depending on license

Other regulated industries:

• Real estate funds: Special audit requirements
• Pension funds: Additional actuarial verification
• Non-profit organizations: Varies by canton

Consequences of missing audit:

Legal consequences:

• Administrative fines: CHF 100-10,000 for board of directors
• Dissolution threat: In case of serious violations
• Commercial register: Entries may be refused
• Criminal law: For intentional violations

Practical disadvantages:

• Banking sector: Banks often refuse loans without audit
• Business partners: Loss of trust with important customers
• Investors: Due diligence becomes difficult
• Sale: Company value may decrease

Timing and deadlines:

When must the audit take place?

• Annually: For each financial year
• After annual accounts: Audit after preparation of accounts
• Before general meeting: Report must be available for AGM
• Deadline: 6 months after end of financial year

Cost-benefit analysis:

Advantages of an audit:

• Legal certainty: Compliance with all legal provisions
• Creditworthiness: Better banking conditions
• Trust: Increased credibility with stakeholders
• Internal control: Detection of weaknesses and risks

Disadvantages/Costs:

• Financial burden: Annual audit costs
• Time burden: Management must invest time
• Documentation: Increased administrative burden

Audit with Findea.ch:

We help you assess your audit obligation:

Free consultation:

• Threshold verification: Analysis of your company data
• Opt-out check: Clarification of possibilities
• Cost estimation: Transparent pricing

Professional execution:

• Licensed auditors: All required authorizations
• Efficient execution: Minimal effort for you
• Consulting included: Free improvement suggestions

Checklist: Do I need an audit?

• Check legal form: Ltd/LLC are fundamentally subject to audit
• Calculate thresholds: Exceeded over 2 years?
• Determine employee count: Fewer than 10 full-time positions?
• Ask shareholders: All agree with opt-out?
• Clarify banking relationships: Do creditors require an audit?

Conclusion: The audit obligation depends on various factors. In case of uncertainties, you should seek professional advice to avoid legal risks.