Ordinary audit or limited review: which Swiss companies need which

Many Swiss company directors learn which audit applies to them only when an invoice arrives. The rule is mechanical and it sits in the Code of Obligations. Knowing it in advance allows directors to plan the timing, the cost and the choice of auditor.

The three thresholds

According to a summary by the Swiss firm Nexova of Article 727 of the Code of Obligations, a company must have an ordinary audit if it exceeds two of three thresholds in two consecutive financial years:

The two-year rule works in both directions. A company moves back to a limited review only after falling below two of the three thresholds for two consecutive years.

Companies that need an ordinary audit whatever their size

The same summary lists three groups that need an ordinary audit regardless of the thresholds:

• Publicly listed companies
• Companies that must prepare consolidated accounts under Article 963
• Companies whose articles of association or a general meeting resolution require one

Shareholders holding at least 10% of the share capital can also request an ordinary audit.

What a limited review covers

Smaller companies with more than 10 full-time equivalent employees that fall below the thresholds undergo a limited review under Articles 727a and 729a. The procedures are inquiries, analytical procedures and limited detailed testing, applying the Swiss standard on limited statutory examination that has been in effect since 1 January 2023.

The conclusion is a negative assurance reported to the general meeting. It doesn’t include a review of the internal control system, third-party confirmations, inventory observation or specific fraud procedures.

Who may sign the report

Auditor qualifications differ by audit type:

1. A limited review requires a licensed auditor under Article 727c
2. An ordinary audit requires a licensed audit expert under Article 727b

Independence rules are tighter for ordinary audits. The same firm generally can’t prepare the accounts and audit them, while a limited review allows it if safeguards separate the two teams.

Opting out, in and up

Companies with no more than 10 full-time equivalent employees can waive the limited review if all shareholders agree. The Nexova summary says the waiver must be filed before the financial year begins and that retroactive opt-outs haven’t been allowed since 1 January 2025. Any shareholder can still reverse the waiver by requesting an audit at least 10 days before the general meeting.

Voluntary choices go the other way too. A company with no legal duty can choose a limited review (opt-in), and one that is subject to a limited review can move up to an ordinary audit if shareholders holding 10% or more request it.

Directors should check any such figures against the current text of the Code of Obligations, since the summary is a secondary source.

Two examples

A company with a CHF 25 million balance sheet, CHF 30 million revenue and 180 employees exceeds only one of the three criteria, so it stays under a limited review. A company with a CHF 15 million balance sheet, CHF 45 million revenue and 300 employees exceeds two (revenue and headcount). After two consecutive years, it would need an ordinary audit.

The second company would need to appoint a licensed audit expert and expect the process to take longer than a limited review.

Beyond statutory minimums

Banks, insurers and other regulated entities face additional audit requirements. Forvis Mazars in Switzerland lists prudential audit among its financial audit work, which involves checking whether prudential requirements are complied with. Regulated entities therefore deal with audit questions that go past the thresholds above.

Choosing an auditor

Once the audit type is known, the choice of provider matters. Factors boards weigh include sector experience, independence, use of data analytics in areas such as journal entry testing and revenue recognition, and the ability to cover subsidiaries abroad. Forvis Mazars in Switzerland states that the network operates in more than 100 countries, which matters for groups that need consistent procedures across entities.

Boards comparing Financial audit services in Switzerland can ask for a proposal that sets out the audit type, the timeline and the expected management input, so the engagement doesn’t stretch past the closing date.

A planning checklist

• Confirm the audit type by testing each of the three criteria across two years
• Check whether any consolidated accounts trigger an ordinary audit
• Review the articles of association for audit clauses
• Agree a timetable with the auditor at least a quarter before year-end