Types of audits in Switzerland: Which audit applies to your company?

Which types of audits are there in Switzerland?

In Switzerland, there are various types of audits that differ according to company size, legal requirements and audit objective. While the limited and ordinary audits are regulated by law, companies can carry out voluntary agreed-upon audits or may be required to undergo special audits in certain situations. Which type of audit is relevant depends in particular on the company structure and the legal requirements.

The audit obligation is regulated in the Swiss Code of Obligations (CO). A basic distinction is made between audits required by law, voluntary audits and event-driven special audits.

For many companies, the limited audit is the standard case. Larger businesses are subject to an ordinary audit, while companies can use an agreed-upon audit to have specific areas reviewed. In addition, special audits may be required in the event of certain corporate law transactions.

Key points at a glance

• Companies in Switzerland are subject to different types of audits depending on their size.
• For many companies, the limited audit is the legal standard.
• Companies with fewer than ten full-time positions can, under certain conditions, waive an audit (opting-out).
• Larger companies must carry out an ordinary audit.
• With an agreed-upon audit, individual areas such as inventories, receivables or financial processes can be reviewed on a voluntary basis.
• Special audits may also be required for companies without an ongoing audit.

Which types of audits are mandatory – and which are voluntary?

The following overview shows the most important differences between the types of audits in Switzerland.

What is a limited audit?

The limited audit is the legally prescribed type of audit for many Swiss companies. It examines whether the financial statements appear plausible and whether there are indications of material errors or breaches of law or articles of association. Companies that are not subject to an ordinary audit must generally have their financial statements audited on a limited basis – provided there is no permissible opting-out.

The audit is carried out in a proportionate and risk-oriented manner. Instead of checking all business transactions in detail, the audit firm assesses selected areas of the financial statements based on inquiries, analyses and samples.

When is it mandatory – and when is opting-out possible?

A limited audit is generally required if a company is subject to an audit requirement but does not meet the legal conditions for an ordinary audit.

A waiver of the limited audit (opting-out) is possible if:

• the company employs no more than ten full-time positions on average per year, and
• all shareholders or partners agree.

Opting-out is primarily intended for smaller businesses. If the threshold is exceeded, the board of directors must examine whether an audit firm will be required in future.

In practice, the AHV payroll declaration often serves as a basis for determining the number of full-time positions. Especially in the context of the year-end closing, it becomes apparent at an early stage whether the audit obligation is changing.

Note: Since 2025, retroactive opting-out is no longer possible. The waiver of an audit must be decided and registered in good time.

What is examined in a limited audit?

The focus is on the plausibility of the financial statements. The audit concentrates on whether figures, valuations and material items appear reasonable.

Depending on the company, the following areas are particularly in focus:

• Financial statements: Are the balance sheet and income statement plausible?
• Trade receivables and other receivables: Are outstanding receivables valued realistically?
• Inventories and stock: Are stock levels documented in a plausible way?
• Financial processes: Are there any noticeable irregularities or risks?

The specific scope of the audit depends on company size, complexity and risk profile.

Why can a limited audit make sense despite opting-out?

Even if a company could waive an audit, a limited audit can still make good business sense. In particular for financing, business growth or succession, transparent financial figures provide a better basis for decision-making.

A voluntary audit can be particularly useful if:

• bank financing is planned
• investors or buyers request insight
• a company is growing strongly
• the board of directors wants additional assurance regarding financial figures

“A limited audit often creates added value where companies want to have their financial figures independently reviewed – for example in the context of growth, financing or strategic changes.” – Curd Fasching, audit expert

What are the advantages and disadvantages of a limited audit?

The limited audit offers a proportionate scope and is suitable as the legal standard for many companies.

What is an ordinary audit?

The ordinary audit is the most comprehensive statutory type of audit in Switzerland and is aimed at larger or economically more significant companies. It includes an in-depth review of the financial statements and additional control mechanisms. Companies that exceed certain thresholds or are subject to special legal requirements must carry out an ordinary audit.

Compared to other types of audits, the scope is broader and more formalized. The ordinary audit is therefore particularly suitable for more complex corporate structures.

When is an ordinary audit mandatory?

An ordinary audit is required if a company exceeds at least two of the following thresholds in two consecutive financial years:

Regardless of the thresholds, an ordinary audit may also be mandatory, among others, for:

• Listed companies
• Companies required to prepare consolidated financial statements
• Companies with outstanding bonds

Under certain conditions, companies may voluntarily opt for an ordinary audit (opting-up).

When is there an obligation to prepare consolidated financial statements?

An obligation to prepare consolidated financial statements generally exists if several companies are under common control and thus form a group. In this case, consolidated financial statements must be prepared in addition to the individual financial statements.

However, the obligation does not exist or ceases to exist if the group of companies as a whole is of only minor economic significance or is already included in superior consolidated financial statements. Changes in the group structure can also result in consolidated financial statements no longer being required.

Since the assessment in individual cases depends on various factors, the consolidation obligation should be reviewed regularly, especially in holding structures and corporate groups.

What is examined in an ordinary audit?

The ordinary audit includes an in-depth review of the financial statements as well as key corporate processes. The objective is to assess whether financial reporting complies with legal requirements.

Depending on the company, the following areas are particularly in focus:

• Financial statements and valuations: Audit of material balance sheet and income statement items
• Internal control system (ICS): Assessment of key control mechanisms
• Business processes and evidence: In-depth review of relevant documentation and procedures
• Risk areas: More systematic audit of significant risks

The specific scope depends on the corporate structure, risks and regulatory requirements.

What are the advantages and disadvantages of an ordinary audit?

In contrast to the limited audit, the ordinary audit includes additional audit procedures and the assessment of the internal control system (ICS).

What is an agreed-upon audit and when is it worthwhile?

An agreed-upon audit is a voluntary engagement with an individually definable scope. Companies can have specific areas, processes or issues reviewed without having to carry out a statutory audit. Businesses frequently use an agreed-upon audit to have selected processes or risk areas independently assessed and to derive concrete recommendations for action.

Unlike statutory types of audits, the scope of the engagement is defined individually. Companies work with the auditor to define which topics or processes are to be analysed.

Which areas can be selectively audited?

An agreed-upon audit is particularly suitable for companies that want clarity in specific areas or wish to review particular risks.

Typical areas of application are:

• Inventories and stocktaking processes: Are quantities, valuations and procedures accurate?
• Receivables management and trade receivables: Are outstanding receivables correctly recorded and are risks identified at an early stage?
• Booking and financial processes: Are procedures transparent and properly documented?
• Internal processes: Are there inefficiencies or control gaps?
• Specific issues: Review of individual risks or suspicions

Especially for inventories, receivables or financial processes, a targeted audit can help to identify weaknesses at an early stage and improve workflows.

What are the advantages and disadvantages of an agreed-upon audit?

An agreed-upon audit allows for targeted review without the full scope of a statutory audit. At the same time, the benefit largely depends on how clearly the objective and scope are defined.

“An agreed-upon audit is particularly suitable when companies want to review individual processes in a targeted way – for example receivables, inventories or financial workflows.” – Curd Fasching.

Which special audits exist?

In addition to regular types of audits, there are special audits in Switzerland that may be required in certain corporate law situations. These audits do not depend on an ongoing audit obligation, but on the specific event. Companies with an opting-out can therefore also be affected.

Special audits are limited to a clearly defined set of facts and serve to ensure compliance with legal requirements in important corporate transactions.

When is a capital increase audit required?

A capital increase audit may be required when a company raises new capital and must meet statutory requirements. This is particularly relevant in the case of more complex capital measures or contributions in kind.

Whether an audit is necessary depends on the specific structure of the capital increase.

Which other special audits exist?

Depending on the situation, further audits may be required:

• Capital reduction audit: Audit in connection with a reduction in share capital.
• Incorporation audit: Relevant in qualified incorporations, for example in the case of contributions in kind.
• Liquidation audit: Audit of certain financial aspects in the dissolution of a company.

What is an audit firm?

The audit firm is an independent body that carries out the statutory audits of the financial statements. The scope and requirements of the audit vary depending on the type of audit.

Depending on the company’s situation, licensed auditors or licensed audit experts are engaged.

What does an audit firm examine?

The audit firm reviews the financial statements and assesses whether they comply with legal requirements.

The focus is particularly on:

• Traceability of financial figures
• Valuations and material items in the financial statements
• Relevant documents and evidence
• Legal requirements of the respective type of audit

From when do I need an audit firm?

Companies subject to a limited or ordinary audit require an audit firm. A waiver is only possible within the framework of a valid opting-out.

Which type of audit is right for your company?

Which type of audit is sensible or mandatory depends primarily on company size, legal requirements and the specific audit needs. While a limited audit is the standard case for many companies, larger entities require an ordinary audit. In certain situations, a voluntary agreed-upon audit or a special audit may also be sensible or required.

The following overview provides an initial orientation:

What matters is not only which type of audit is legally required, but also which scope of audit is suitable for the company’s situation.

“The appropriate type of audit is not determined solely by legal criteria. Companies should also assess which form of independent audit best supports their current situation.” – Curd Fasching