Ordinary audit, limited audit and opting-out

Not all Swiss companies must have their accounts audited in the same way, and some can dispense with it entirely. The Code of Obligations provides for three scenarios — ordinary audit, limited audit and opting-out — and understanding which one you fall into avoids both unnecessary costs and non-compliance with the commercial register.

Why the audit obligation exists

The audit is an independent check on the annual accounts: an external audit body verifies that the balance sheet, income statement and notes comply with the law and reflect the real situation of the business. It serves to protect shareholders, creditors and — in larger companies — the public interest. The intensity of the check grows with the size and importance of the company.

Ordinary audit: the most extensive check

The ordinary audit is the most thorough level. It concerns the economically most significant businesses and involves, among other things, verifying the existence of an internal control system. It is triggered when the business exceeds, for two consecutive financial years, two of the following three parameters:

Balance sheet total above the statutory threshold (in the order of CHF 20 million).
Turnover above the threshold (in the order of CHF 40 million).
Number of full-time positions on annual average above the threshold (in the order of 250).

Listed companies and those required to prepare consolidated accounts are also subject to the ordinary audit. The exact threshold values are set by the CO: if you are close to the limits, it is worth checking them precisely, because a change of regime has concrete consequences.

Limited audit: the SME standard

Most GmbHs and AGs that do not reach the ordinary-audit thresholds are subject to a limited audit (review). It is a less extensive check: it is based mainly on enquiries, analytical procedures and appropriate verifications, without the breadth of the ordinary audit. The audit body must nevertheless be independent and, for the limited audit, registered as a licensed auditor.

The result is a leaner report, but not for that reason without value: it still gives shareholders and creditors an external assurance on the reliability of the accounts.

Opting-out: when it can be waived

The smallest SMEs can waive the limited audit altogether. This is the so-called opting-out, allowed on two cumulative conditions:

The business does not have more than 10 full-time positions on annual average.
All the shareholders consent to it.

Opting-out is not automatic: it must be resolved and entered in the commercial register. Until the waiver is entered, the audit obligation remains. The waiver also applies to subsequent financial years, but lapses if the conditions cease to be met — for example if the workforce permanently exceeds the threshold.

Note: opting-out means no external audit, not no accounting. The obligations to keep ordinary accounts, prepare the annual closing and retain records for ten years remain fully in force. The waiver concerns only the check on the accounts, not their preparation.

Which choice is best

For an SME below the thresholds, opting-out reduces costs and obligations and is often the natural choice in closely held companies. But it is not always the best:

If you anticipate the entry of investors or outside shareholders, a limited audit gives an extra assurance and increases the credibility of the accounts.
If you are seeking significant bank financing, the institution may appreciate or require an audit.
Where there are non-operating shareholders, the audit protects those who do not follow day-to-day management.

The decision should therefore be taken looking not only at the immediate saving, but at the goals of the coming years.

A formal step not to be overlooked

Both the appointment of the audit body and the opting-out go through the commercial register. Mistakes here — a waiver never entered, an auditor not appointed when required — create formal irregularities that surface at the least convenient moments, for example during a due diligence or a credit application.

How we work

At SIH ONE we check which regime your company falls under, monitor the parameters when you approach the ordinary-audit thresholds, and correctly handle the resolution and registration of the opting-out when the conditions are met. The accounts we prepare — pre-processed by our AI systems and validated by a licensed professional — are set up to withstand a possible audit without difficulty.

Do you want to know whether your company must be audited or can opt out? Let’s check it.