Introduction

In Switzerland, audits are an integral part of corporate governance, ensuring transparency, compliance, and financial accuracy. Whether you are a startup, a large corporation, or a special entity like a foundation or pension fund, understanding the Swiss audit requirements is crucial. This guide will help you navigate the complexities of getting a Swiss audit, ensuring your business meets all legal obligations and maintains its reputation for integrity.

What is a Swiss Audit?

A Swiss audit is a formal examination of a company’s financial statements, conducted by an independent, licensed auditor. The purpose is to verify that the financial reports accurately reflect the company’s financial position, comply with Swiss law, and adhere to accounting standards. Audits are mandated by the Swiss Code of Obligations and are designed to protect stakeholders, including shareholders, employees, and the public.

Types of Audit in Switzerland?

Switzerland categorizes audits into two main types:

Ordinary Audit:

An ordinary audit is required for larger companies. A company must have an ordinary audit if it meets two out of the three following criteria for two consecutive financial years:

• Total assets: CHF 20 million or more.
• Annual turnover: CHF 40 million or more.
• Number of full-time employees: 250 or more on an annual average.

Ordinary audits are also required for:

• Companies that are listed on a stock exchange.
• Companies that have issued bonds.
• Companies that are required to prepare consolidated financial statements.
• Companies where shareholders representing at least 10% of the share capital request an ordinary audit.

Limited Audit:

A limited audit is required for companies that do not meet the criteria for an ordinary audit but still meet at least one of the following conditions:

• More than 10 full-time employees on an annual average.
• A shareholder requests a limited audit.

Small companies can also opt for a limited audit if they do not reach the thresholds that mandate an ordinary audit.

Audit Exemption:

Small companies (i.e., companies with fewer than 10 full-time employees on average during the year) can opt out of the audit requirement altogether, provided all shareholders agree (this is known as the "opting-out" procedure).

Special Cases

Certain companies, such as foundations, pension funds, and financial institutions, may be subject to specific audit requirements regardless of size, depending on regulations governing those sectors.

1. Foundations:

Foundations in Switzerland are typically subject to stricter oversight and are generally required to undergo an audit, regardless of their size.

• Ordinary audit: Required if the foundation is considered large, following the same criteria for commercial companies (total assets, turnover, and number of employees).
• Limited audit: Even smaller foundations are often required to have at least a limited audit unless the foundation is very small, and the supervisory authority grants an exemption.
• Exemption: Possible for very small foundations, but it must be approved by the foundation supervisory authority.

2. Pension Funds:

Pension funds in Switzerland are subject to mandatory ordinary audits.

• These audits ensure compliance with specific legal and regulatory requirements related to the management of pension assets, contributions, and benefits.
• The audit must be conducted by a licensed auditor recognized by the Federal Social Insurance Office (FSIO).

3. Banks and Financial Institutions:

Banks, insurance companies, and other financial institutions are heavily regulated and require strict auditing.

• Ordinary audit: Mandatory for all financial institutions, regardless of size, due to their systemic importance and the need to protect depositors, investors, and policyholders.
• These audits are conducted in accordance with regulations set by the Swiss Financial Market Supervisory Authority (FINMA), which oversees the financial industry.
• The audit focuses not only on financial statements but also on the institution's compliance with regulatory requirements, risk management, and internal controls.

4. Publicly Listed Companies:

Companies listed on a stock exchange in Switzerland are required to undergo an ordinary audit.

• This audit ensures that the financial statements and disclosures meet the transparency and reliability standards expected by investors and regulatory bodies.
• The auditors must be independent and licensed, ensuring they can conduct a thorough and impartial audit.

5. Insurance Companies:

Insurance companies, like banks, are subject to mandatory ordinary audits.

• The audit requirements for insurance companies are also governed by FINMA and are designed to ensure that these companies maintain sufficient reserves and adhere to strict regulatory standards.
• The audit will typically include a review of the company's solvency, claims management, and adherence to insurance regulations.

6. Cooperatives:

Cooperatives with more than 10 full-time employees on average during the year are required to have a limited audit.

• Cooperatives that meet the criteria for an ordinary audit based on size must undergo a full audit.
• Cooperatives that are smaller can opt out of the audit requirement if all members agree, similar to small companies.

7. Associations:

Associations may be required to have an audit if:

• They engage in commercial activities and exceed the thresholds for a limited or ordinary audit.
• They receive significant public funds or donations, in which case an audit may be required by the grantor or donor.
• The association's bylaws or membership agreements mandate an audit.

8. Public Sector Entities:

Public sector entities, such as municipalities or government-owned corporations, are often subject to specific auditing requirements set by public finance laws or regulations.

• These audits typically focus on financial management, compliance with public finance laws, and the efficient use of public resources.

9. Non-Profit Organizations (NPOs):

Non-profit organizations, depending on their size, funding sources, and activities, may also be required to undergo an audit.

• If an NPO receives substantial public funds, grants, or donations, it may be required by the funding bodies or Swiss authorities to conduct an audit.
• NPOs with significant economic activities might be subject to the same auditing requirements as commercial companies.

Do I need an AMLA audit? Or just an normal audit? 

An AMLA audit in Switzerland is distinct from a regular financial audit. It specifically focuses on ensuring compliance with the Anti-Money Laundering Act (AMLA), which is designed to prevent money laundering and terrorist financing within the financial sector and other high-risk industries.

What is an AMLA Audit?

An AMLA audit is a specialized examination required for certain businesses that operate in industries susceptible to money laundering risks. This audit assesses whether these businesses are complying with the obligations set out in the Anti-Money Laundering Act. The audit ensures that the company's internal controls, processes, and policies are adequate to detect, prevent, and report potential money laundering activities.

Who Needs an AMLA Audit?

An AMLA audit is required for businesses in specific sectors that are particularly vulnerable to money laundering activities. These include:

• Financial Institutions: Banks, insurance companies, and other financial entities.
• Independent Asset Managers: Firms that manage assets on behalf of clients.
• Lawyers and Notaries: When involved in certain financial transactions.
• Trustees: Particularly those involved in managing assets or setting up legal entities.
• Real Estate Agents: Engaged in transactions involving high-value properties.
• Dealers in Precious Metals and Stones: Particularly when dealing in large cash transactions.
• Casinos: Due to the high volume of cash transactions.
• Cryptocurrency Businesses: Including exchanges and wallet providers who handle client funds.

Who Conducts an AMLA Audit?

An AMLA audit must be conducted by a licensed and qualified auditor who is recognized by the appropriate supervisory authority. This is not the same as a general financial auditor. Auditors conducting AMLA audits must have specific expertise in anti-money laundering regulations and practices.

• Self-Regulatory Organizations (SROs): In Switzerland, many businesses subject to AMLA are members of a Self-Regulatory Organization (SRO), which can arrange for an AMLA audit through their own auditors.
• Regulatory Authorities: For certain financial institutions, AMLA audits may be overseen by the Swiss Financial Market Supervisory Authority (FINMA).

AMLA vs. Regular Financial Audit

• Scope: A regular financial audit focuses on the accuracy of financial statements and compliance with accounting standards. An AMLA audit, on the other hand, is specifically concerned with the company’s compliance with anti-money laundering regulations.
• Objective: The primary objective of an AMLA audit is to prevent illegal activities such as money laundering and terrorist financing, whereas a financial audit aims to ensure the financial integrity and accuracy of a company’s financial records.
• Specialization: AMLA audits require specialized knowledge of anti-money laundering laws, whereas financial audits require expertise in accounting and financial reporting.

Why is an AMLA Audit Important?

Compliance with AMLA is crucial for businesses in high-risk sectors because failure to comply can result in severe penalties, including fines, loss of business licenses, and significant reputational damage. An AMLA audit helps ensure that the business has adequate controls in place to mitigate these risks and complies with all regulatory requirements.

Steps to Getting an Audit in Switzerland

1. Determine Your Audit Type:

• Assess your company’s size and industry to determine whether you need an ordinary audit, a limited audit, or if you qualify for an exemption.

2. Choose a Licensed Auditor:

• Audits must be conducted by independent, licensed auditors recognized by the Swiss Federal Audit Oversight Authority (FAOA). Choose an auditor with experience in your industry and a reputation for thoroughness and integrity.

3. Prepare for the Audit:

• Organize your financial records, internal controls, and compliance documentation. The more prepared you are, the smoother the audit process will be.

4. Conduct the Audit:

• The auditor will review your financial statements, internal controls, and compliance with Swiss law. This process may include on-site visits, interviews with management, and a review of financial records.

5. Receive the Audit Report:

• After the audit, the auditor will provide a report detailing their findings. If issues are identified, you may need to take corrective actions.

6. Compliance and Follow-Up:

• Ensure that any recommendations from the auditor are implemented and that your company remains compliant with Swiss regulations.

How to find the right auditor?

Finding a list of auditors in Switzerland is relatively straightforward, as there are several resources and methods you can use to identify qualified and licensed auditors. Here’s how you can find them:

1. Federal Audit Oversight Authority (FAOA)

The Swiss Federal Audit Oversight Authority (FAOA) is the regulatory body responsible for supervising the audit profession in Switzerland. They maintain a public register of licensed auditors and audit firms.

• How to Access:
  • Visit the FAOA website and navigate to the "Public Register" section.
  • You can search for individual auditors or audit firms by name, location, or registration number.
  • The register includes information about the auditor’s qualifications, licenses, and areas of expertise.

2. Swiss Institute of Certified Accountants and Tax Experts (EXPERTsuisse)

EXPERTsuisse is the professional association for accountants, tax experts, and auditors in Switzerland. Members of EXPERTsuisse are typically highly qualified and adhere to strict professional standards.

• How to Access:
  • Visit the EXPERTsuisse website and use their directory to find auditors and audit firms.
  • You can search by location, service offered, or industry specialization.

3. Cantonal Registers

Each canton in Switzerland may also maintain its own register of licensed auditors. These registers are often available online or through the cantonal authorities.

• How to Access:
  • Visit the official website of the canton where your business is located.
  • Look for the section related to business or economic affairs, where you might find directories of licensed professionals, including auditors.

4. Chambers of Commerce

The Swiss Chambers of Commerce can also be a resource for finding auditors. They often have directories or can provide recommendations for auditors who are familiar with local business conditions and regulations.

• How to Access:
  • Visit the website of the Chamber of Commerce for your region or canton.
  • Use their business directories or contact them directly for recommendations.

5. Professional Networks and Referrals

Networking within your industry or through professional associations can also help you find a reputable auditor. Many businesses find their auditors through referrals from other companies or industry professionals.

• How to Use:
  • Attend industry events, join professional associations, or ask for recommendations from peers or business partners.

6. Online Business Directories

Several online platforms provide directories of professionals, including auditors. Websites like "local.ch" and "search.ch" can be useful for finding auditors based on location and services.

• How to Access:
  • Visit local.ch or search.ch and search for "auditors" or "audit firms."
  • Filter the results by region or specific services you need.

7. Legal and Accounting Firms

Many legal and accounting firms in Switzerland also offer auditing services or can recommend reputable auditors. If your company already works with a law firm or accounting firm, they might be able to connect you with a qualified auditor.

• How to Use:
  • Contact your existing legal or accounting service provider and inquire about audit services or referrals.

8. Online Reviews and Testimonials

Once you have a list of potential auditors, it can be helpful to look for reviews or testimonials to gauge their reputation and the quality of their services. Websites like Google Reviews, LinkedIn, or specialized forums might have valuable insights.

• How to Use:
  • Search for the auditor’s or audit firm’s name online along with terms like "reviews" or "testimonials."

‍

When choosing an auditor in Switzerland, it’s important to ensure they are licensed, reputable, and experienced in your industry. Start with the FAOA’s public register for a reliable list, and then narrow your options based on location, specialization, and professional recommendations. With the right auditor, your business can ensure compliance, maintain financial integrity, and foster trust with stakeholders.

Why a Swiss Audit is Important

Conducting a Swiss audit is not just a legal requirement; it is also a strategic tool for business growth. An audit provides assurance to investors, partners, and customers that your financial statements are accurate and that your business is managed with integrity. It can also help identify areas for improvement, enhance internal controls, and ultimately increase your company’s value.

Conclusion

Whether you are a large corporation, a growing SME, or a specialized entity like a foundation or pension fund, understanding the Swiss audit process is essential. By following the steps outlined in this guide and choosing the right type of audit for your business, you can ensure compliance, build trust with stakeholders, and position your company for long-term success in Switzerland’s competitive market.

Remember, getting a Swiss audit is more than a regulatory requirement—it's a commitment to transparency, accuracy, and excellence.

‍