Switzerland: Auditing financial statements and opting out
Auditing financial statements
The main objective when auditing financial statements is to determine if the books agree with the financial statements and are in accordance with the law. This task is carried out by an auditor (Swiss auditor, physical person, company or a partnership) which is elected by the general shareholders for a period of three financial years.
This task principally entails verifying whether or not the assets claimed in the books really exist and also that all liabilities have been entered, in conformity with the provisions and laws on the values of assets and liabilities, based on the correct entry of accounting transactions, accounting records, bank statements, etc.
An audit report is then generated by the auditors attesting to the verification of financial statements and summarizing the result of the audit.
This report is a supporting document for the general assembly used in the process of approving or rejecting the financial statements of the closed financial year and should mention any observed omissions, errors or violations.
A company must have a normal audit if it meets any two of the three following conditions: a turnover which surpasses 20 million francs during two successive financial years, a balance sheet which surpasses 10 million francs in two successive financial years or has more than 50 full time employees. If a company meets only one or zero of the three above-mentioned criteria, it can opt for a limited audit.
Companies which only meet one or fewer of the three above requirements and have fewer than 10 full time employees may choose to waive the audit entirely, provided that all shareholders (or associates) agree to this decision. This is called opting out.
As of June 30, 2009, all new companies must register the decision to opt out with the Commerce Registry at the time the company is created. Companies founded before this date may choose to opt out through a formal request annexed to the minutes of the general shareholders meeting. A declaration to opt out by the shareholders/associates must be included in the annual reports and accounts.