Limited Audit - Requirements for the Audit Office

For Swiss SMEs, the audit office often serves as the first point of contact for questions regarding accounting, social insurances, and value-added tax. This need is addressed by having less stringent independence requirements for the audit office in a limited audit than in a standard audit.

Limited or Standard Audit?

Whether a company must have its annual accounts audited by an audit office in a standard way or whether a limited audit is sufficient depends on the balance sheet total, the turnover, the number of full-time positions, and the obligation to prepare consolidated financial statements.

Requirements for the Audit Office

A standard audit must be conducted by a licensed audit expert, while a limited audit can also be conducted by a licensed auditor. Unlike the standard audit, in a limited audit, the participation of the audit office in the bookkeeping and the provision of other services are allowed. In particular, it may calculate tax provisions, review investments for impairment, and even prepare the annual accounts. If the annual accounts are prepared by the audit office, it must ensure that the client fully understands the content. The client is responsible for the annual accounts in any case.

Risk of Reviewing One’s Own Work

Participation in bookkeeping can lead to a risk of reviewing one's own work. To ensure a reliable audit, organizational and personnel measures must therefore be taken. For example, under no circumstances should the same person participate in bookkeeping and then audit the annual accounts. The auditor must also not be subordinate to any person involved in the bookkeeping or able to influence it.

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