The provisions of the law enacted in 2008 distinguish between a full audit and a limited audit.
The size and importance of a company determines which requirements will be placed on the audit and auditors. Public corporations and commercially significant companies are required to submit to a full audit under Art. 727 of the Swiss Code of Obligations (OR).
Consolidated financial statements required by law must also be fully audited. According to Art. 663e of the Swiss Code of Obligations (OR), a company is exempted from drawing up consolidated financial statements if two of the following criteria are not exceeded in two consecutive fiscal years: a balance sheet total of CHF 10 m, annual sales of CHF 20 m and an average number of full-time employees in the year of 200.
The following limiting criteria will be applied to assess which companies are commercially significant within the meaning of Art. 727 of the Swiss Code of Obligations (OR) from January 1, 2012:
- Balance sheet total of CHF 20 m
- Annual sales of CHF 40 m
- Average number of full-time employees in the year of 250
If two of these variables are exceeded in two consecutive years, a full audit must be carried out. This rule replaces the original limiting criteria (balance sheet total of CHF 10 m, annual sales of CHF 20 m, 50 full-time employees), which Parliament now regards as too low.
In a full audit, the auditor must also confirm the existence of an internal control system set up to the specifications of the board of directors (regarding the preparation of the annual report).
Companies which - according to the criteria contained in Art. 727 OR - are not subject to a full audit are, in principle, subject to a limited audit. If all stockholders agree, a company that has an average of ten FTEs or less during the year can opt out of the limited audit.
Parliament increased the limiting criteria in 2011 with a view to reducing costs for SMEs. At the time, too little account was taken of the benefits of a full audit and the fact that some of the costs involved are passed on to other stakeholders (such as the tax authorities).