Karpeo · Business in Switzerland
Limited audits in Switzerland: requirements, opting-out and preparation
Many Swiss SMEs are subject to a limited statutory audit. Its scope, the conditions for opting out and the duties that arise during financial difficulties are often confused. This article helps you identify the applicable regime and prepare a complete audit file.
By Sarah Prieur · Swiss certified public accountant
The essentials of a limited audit
A limited statutory audit, known as contrôle restreint in French and eingeschränkte Revision in German, is a legal examination of annual accounts used particularly by Swiss SMEs incorporated as a corporation (SA/AG) or limited liability company (Sàrl/GmbH). It involves enquiries, analytical procedures and appropriate detailed testing. It provides limited assurance, without guaranteeing the absence of every error.
- A limited audit applies when an ordinary audit is not required, unless the company has validly opted out.
- Opting out requires, among other conditions, no more than ten full-time equivalent positions on an annual average and the consent of all shareholders or members.
- Since 2025, an existing company’s waiver applies only to future financial years, with the registration application filed before the relevant year begins.
- Capital loss can trigger an audit requirement even where the company has opted out.
Which companies are affected?
For an SA or LLC, first establish whether an ordinary audit is required. The financial-size test applies to companies exceeding two of these three thresholds in two successive financial years:
| Criterion | Threshold to exceed |
|---|---|
| Total assets | CHF 20 million |
| Revenue | CHF 40 million |
| Annual average workforce | 250 full-time equivalent positions |
Exceeding just one criterion does not trigger an ordinary audit under this test. Public companies and companies legally required to prepare consolidated accounts are also covered by the applicable provisions. Shareholders representing at least 10% of share capital may request an ordinary audit; the articles of association or a general meeting resolution may also require one.
Where none of these grounds applies, a limited audit is the default regime for an SA or LLC unless there is a valid opt-out.
These thresholds do not apply indiscriminately to every business. A sole proprietorship has no general duty to appoint an external auditor simply because it keeps accounts. Associations and foundations are also subject to specific provisions.
What does the auditor actually examine?
The examination covers the annual financial statements and the proposed appropriation of available earnings. The auditor considers whether facts have come to light indicating non-compliance with the law or the articles of association.
The work includes enquiries with responsible staff, comparisons of figures, analysis of movements and suitable detailed checks. For example, the auditor may request evidence for an unusual provision or an explanation of a sharp increase in receivables.
A limited audit does not systematically verify every transaction. It is not an audit of the quality of strategy or the board’s management. Examining the existence of an internal control system belongs to the ordinary audit; that confirmation should not be presented as an automatic result of a limited audit.
The auditor must hold the appropriate Swiss licence. Check the provider’s status with the Federal Audit Oversight Authority (FAOA, known as ASR in French and RAB in German), as well as independence.
Can a company opt out of a limited audit?
Opting out requires the agreement of all shareholders or members and an annual average workforce of no more than ten full-time equivalent positions (FTEs). Exactly ten FTEs therefore does not rule out a waiver. Calculate the annual average and employment percentages, rather than simply counting people on one date.
Example: eight full-time employees and four half-time employees represent ten FTEs if their working arrangements remain unchanged throughout the year. The calculation must reflect actual starters, leavers and changes in employment percentages.
Since 1 January 2025, an existing company must apply to register its waiver before the financial year concerned begins. For a company with a calendar-year financial year, filing during 2026 cannot retrospectively remove the audit requirement for 2026.
The Federal Commercial Registry Office’s Communication 1/26 clarifies the supporting documents and the auditor’s mandate. For a waiver effective in 2027, prepare the application in 2026 with the required approved accounts and supporting evidence. The audit obligations for 2026 remain. Opting out at incorporation is a separate case.
Workforce, thresholds, the waiver and timing should be reviewed together. Karpeo can help prepare the accounts and information needed for discussions with the appropriately licensed auditor.
What happens after opting out?
The waiver remains effective in subsequent years while its conditions continue to be met. Review it after registration: workforce growth, a shareholder request or changed circumstances may reinstate an audit requirement.
Any shareholder may demand a limited audit no later than ten days before the general meeting. The meeting must then appoint an auditor.
Article 725a of the Swiss Code of Obligations (CO) requires a limited audit of the latest annual accounts before their approval where the company has a capital loss and no appointed auditor. The board must appoint a licensed auditor. An exception applies if the board files an application for a debt restructuring moratorium.
Where there are justified concerns about over-indebtedness, interim accounts and their audit are required under Article 725b. Our article on capital loss and over-indebtedness distinguishes these situations.
Opting out concerns the audit, not the obligation to keep accounts or management’s responsibility for the financial statements.
How to prepare the audit file
The quality of the year-end close affects how smoothly the audit proceeds. Sending only a balance sheet and waiting for questions usually slows the engagement.
| File area | Useful contents |
|---|---|
| Annual accounts | Balance sheet, income statement, notes and comparative figures |
| Balances | Trial balance, general ledger and bank reconciliations |
| Assets | Detailed receivables, inventory, fixed assets and depreciation calculations |
| Liabilities and risks | Payables, loans, contracts, provisions and disputes |
| Governance | Articles of association, minutes and proposed appropriation of earnings |
| Tax and employees | VAT returns, taxes, payroll and social security contributions |
The documents should explain estimates. A provision without a calculation or an old receivable without a comment requires clarification. Also check the notes to the financial statements, including guarantees, commitments and events after the reporting date.
Agree on a contact person who can answer questions and review corrections with management. The auditor examines the accounts; management remains responsible for them.
How to read the report and compare quotations
An unmodified conclusion is generally expressed in negative form: the auditor has not encountered facts leading to the conclusion that the accounts are non-compliant. This negative form of assurance does not mean an adverse opinion.
Read the scope, any qualifications, observations and independence disclosures as well. A conclusion limited by missing evidence does not have the same significance as an examination without that problem.
To compare quotations, specify the number of entities, accounting volume, inventory, complex estimates, timetable and state of preparation. Separate audit fees from the cost of completing or correcting bookkeeping. A price without this context is difficult to compare.
The quotation should identify the licensed provider, the person responsible and the work included. Audited accounts may be useful to a bank, but do not guarantee credit approval or a favourable interest rate.
Karpeo can define the accounting work still needed and organise supporting documents. Contact us to agree each party’s role and the timetable for your next audit.
Frequently asked questions
Can a single-member LLC opt out?
Yes, if every opting-out condition is met. Having only one member does not automatically remove the audit obligation or the formalities for waiving it.
Do ten employees prevent opting out?
Not necessarily. The test is an annual average of no more than ten full-time equivalent positions. Employment percentages and changes during the year must be reflected.
Can I opt out when closing the previous financial year?
For an existing company, the waiver must concern a future financial year and registration must be requested before that year begins. It cannot retrospectively eliminate an audit for a past year.
Can the firm keeping the accounts also audit them?
For a limited audit, the Code of Obligations permits certain involvement with appropriate organisational and personnel safeguards. Actual and perceived independence, as well as licensing, must be checked. This is not blanket permission to audit your own work without separation.
Does opting out remove the need for notes to the accounts?
No. An SA or LLC remains subject to annual financial reporting duties, including the notes. The waiver concerns the audit, not preparation of the accounts.
Sources and references
About the author
Sarah Prieur
Sarah Prieur is a Swiss certified public accountant and a partner at Karpeo. She supports entrepreneurs, self-employed professionals and SMEs with accounting, tax and business decisions in Switzerland.
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