Limited Audit - What is it?

Limited audit is an examination of the annual accounts targeted at SMEs, with smaller scope and depth compared to an Ordinary Audit.

Objective of the Limited Audit

The goal of this type of audit is for the auditor to be able to state whether he has encountered any matters that led him to conclude that the annual accounts do not comply in all material respects with the laws and statutes. Since the audit is less thorough than an ordinary audit, the auditor only provides a negatively formulated assurance ("annual accounts contain no material misstatements").

Requirements for the Limited Audit

In order to conduct a limited audit, several points must be considered. Specifically, there must be no obligation for the company to undergo an ordinary audit. Notably, these are (according to Art 727 para. 1 no. 2 CO) the following metrics:

• Balance sheet total of 20 million francs
• Revenue of 40 million francs
• 250 full-time positions on an annual average

The condition here is that a company must exceed at least two of the above-mentioned requirements in two consecutive fiscal years. If the conditions are not met and there is also no obligation to conduct an ordinary audit, then a limited audit according to Art 727a CO can be carried out.

CO 727a

Paragraph 1 of this article emphasizes the negative component: "If the conditions for an ordinary audit are not met, the company must have its annual accounts audited by an audit firm on a limited basis."

The exception to this rule is paragraph 2, which allows for a waiver of the audit if the SME has fewer than 10 full-time positions.