What is a revision?

A revision, also referred to as an audit, is an essential tool of corporate management used to verify the correctness of business processes. Many companies are legally required to conduct an audit regularly to ensure that their financial reports and internal control systems are accurate and reliable. Not only companies but also public institutions and non-profit organizations regularly undergo this examination. But why is an audit so important and how does it work?

What is a revision or an audit?

A revision, also known as an audit, is a systematic process where the financial records, internal processes, and the overall control system of a company are scrutinized. The goal is to ensure that business operations are properly and transparently documented. An audit, as it is often called in the international context, can be performed by either internal or external auditors. While internal audits are conducted by company employees, external auditors, such as certified public accountants or specialized auditing firms, carry out independent controls.

Why do we need an audit?

The main purpose of an audit is to check the accuracy and completeness of financial reports. Additionally, it ensures that legal requirements and internal guidelines are complied with. An audit can also reveal weaknesses in internal processes that could pose potential risks. This increases the efficiency and transparency of business operations. In many countries, including Switzerland, companies are legally required to have their annual financial statements audited by an independent body to secure the trust of investors, banks, and other stakeholders.

When is an audit necessary?

An audit is generally conducted annually, particularly in connection with a company's annual financial statements. In certain cases, such as suspicion of irregularities or for special projects, special audits may be required. Smaller companies may be exempt from the requirement for external audits but must still ensure that their financial records are in order.

Who conducts the audit?

The conduct of an audit is the responsibility of either internal or external auditors. Internal auditors are employees of a company who regularly control internal processes and procedures. External auditors, on the other hand, are independent auditors, often CPAs, contracted by the company to review the books and business operations. In Switzerland, the auditing is carried out by approved audit experts who act according to the provisions of the Swiss Audit Supervision Act (RAG).

Conclusion

An audit is an indispensable tool to ensure the accuracy of financial reporting and the adherence to regulations. It brings the following benefits:

• Transparency and trust for investors and business partners
• Detection and minimization of risks
• Assurance of the correctness and efficiency of internal processes

A proper audit is essential for the long-term success of a company.

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