In Switzerland, the audit requirement depends on the size and economic importance of the company. The Swiss Code of Obligations distinguishes between three situations: opting-out, limited audit, and ordinary audit.
Opting-out (no auditor)
Small companies may waive the appointment of an auditor if all shareholders agree and the company has fewer than 10 full-time employees on average. In this case, the company is not required to appoint a statutory auditor.
Limited audit (standard audit for SMEs)
If a company does not qualify for an opting-out, it is generally subject to a limited audit. This is a simplified review of the annual financial statements performed by an auditor, focusing on plausibility checks and key transactions rather than a full audit of internal controls.
Ordinary audit (full statutory audit)
A company must undergo an ordinary audit if, for two consecutive financial years, it exceeds two of the following thresholds:
CHF 20 million balance sheet total
CHF 40 million annual turnover
250 full-time employees on average
This audit is more comprehensive and includes detailed testing and evaluation of the company’s internal control systems.