Your company keeps accounts, but must an auditor also examine them? If it can waive the audit, what are the conditions and which financial year can the waiver cover?
A limited audit is the statutory examination normally required for smaller Swiss companies limited by shares (SA/AG) and limited liability companies (Sàrl/GmbH, or LLCs). An ordinary audit involves more extensive work. An opting-out allows an eligible company to dispense with a limited audit. This guide helps you identify the applicable regime and organise the formalities.
Key points
- A limited audit is generally required for an SA/AG or LLC that is not subject to an ordinary audit.
- Opting out requires the consent of all shareholders or members and no more than ten full-time equivalent positions on average over the year.
- An existing company must file its application before the start of the financial year concerned. A new company can declare an opting-out when it is first registered, if the conditions are met.
- Waiving the audit does not remove the obligation to keep accounts or the responsibilities of the directors.
Where should you start? First check whether your SA/AG or LLC needs an ordinary audit. If not, a limited audit is the default. You can then assess opting out: no more than ten full-time equivalents on annual average, unanimous consent and a correctly timed application.
Being small is not enough on its own. Until a valid waiver has been arranged, you should plan for an audit.
Ordinary or limited audit: the Swiss thresholds
A company meets the size test for an ordinary audit if it exceeds two of the following three thresholds in two successive financial years: total assets of CHF 20 million, revenue of CHF 40 million and 250 full-time equivalent positions on annual average.
Size is not the only trigger. Specific requirements also apply to public companies and companies required to prepare consolidated accounts. Shareholders representing at least 10% of the capital can also require an ordinary audit.
Staying below those thresholds does not create an automatic opting-out. The company generally needs a limited audit unless it validly waives it. Sole proprietorships and general partnerships are not subject to the same statutory audit regime as SA/AG companies and LLCs.
Preparing accounts and auditing them are different jobs
Bookkeeping records transactions and supports preparation of the financial statements. An audit provides an external examination under a defined engagement and audit framework.
This explains why an accountant who prepares your accounts is not automatically your statutory auditor. Licensing and independence requirements need to be checked. Management remains responsible for preparing the accounts within its legal duties and supplying the information needed for the audit.
An audit report is not a guarantee of commercial success. It provides a specified level of assurance on the matters covered by the engagement. It does not predict next year’s sales or guarantee that every customer will pay.
What does a limited audit cover?
A limited audit examines, in particular, the annual accounts and the proposed allocation of profits. The auditor uses enquiries, analytical procedures and appropriate detailed testing, then issues a report for the general meeting.
The engagement provides limited assurance. Its scope is narrower than an ordinary audit. An unmodified conclusion broadly means the procedures performed did not identify anything suggesting that the accounts fail to comply with the applicable requirements. It does not mean every invoice was checked or that fraud cannot exist.
Example: a CHF 20,000 customer invoice remains unpaid
The auditor notices an old invoice is still recorded as though it will be collected in full. They question management, examine the available information about the customer and discuss any necessary impairment. If only CHF 5,000 appears recoverable, the file must justify why the accounts still show CHF 20,000 or the balance needs correcting.
Management remains responsible for the accounts and the estimates used. The auditor examines them within the scope of the engagement and expresses a conclusion.
The appointed auditor must hold the appropriate licence and meet independence requirements. Having the same provider prepare and audit the accounts therefore requires an assessment of the legal conditions and the safeguards separating those activities.
How to read a limited audit report
First identify the financial year and accounts examined, then read the conclusion. A limited audit uses negative assurance: broadly, the auditor states that nothing came to their attention through the work performed that would indicate non-compliance. “Negative” describes the wording, not an unfavourable result.
| What the report says | What you should do |
|---|---|
| Unmodified conclusion | Understand the scope: it is neither a check of every invoice nor a guarantee of the company’s future |
| Qualified or otherwise modified conclusion | Identify the affected balance, disagreement or limitation on the work; ask how it affects the accounts and the general meeting’s decisions |
| Emphasis or other highlighted matter | Read the issue carefully: it may draw attention to uncertainty without itself changing the conclusion |
Return to the CHF 20,000 invoice example. If a necessary adjustment has not been recorded, ask how that disagreement appears in the report and what action is needed before the general meeting. The useful response is to understand and address the issue.
When can a Swiss company opt out of an audit?
The company must be eligible for a limited audit, have no more than ten full-time equivalent positions on annual average and obtain the consent of every shareholder or member. Count full-time equivalents (FTEs), not simply the number of people on the payroll.
Calculating headcount: twelve people, but ten FTEs
A company employs eight people full time and four at 50% throughout the year. Its annual average is 8 + 4 × 0.5 = 10 FTEs, not twelve. It meets the headcount condition. The other requirements and any changes during the year still need to be considered.
Existing companies: act before the financial year starts
Since 1 January 2025, an existing company must submit its application to the commercial register before the start of the year for which it seeks the waiver. The supporting documents include the latest approved annual accounts and minutes approving them, together with the audit report where required.
For an existing company seeking a waiver for 1 January to 31 December 2027, the application must therefore be filed before 1 January 2027. Prepare the documents early. A late or incomplete application should not be treated as a successful waiver. A decision taken at the end of 2027 cannot retrospectively remove the audit requirement for 2027.
Applying in 2026: what still needs to happen in 2027?
Federal Commercial Registry Office guidance 1/26 of 3 March 2026 explains how the opting-out interacts with the auditor’s term of office. For a company using the calendar year:
| When | Practical consequence |
|---|---|
| Application filed during 2026 | The waiver can take effect for 2027; the application will generally rely on the approved 2025 accounts |
| Year-end on 31 December 2026 | The 2026 accounts still need to be audited |
| General meeting approving the 2026 accounts in 2027 | The auditor’s final term ends after the accounts, accompanied by the audit report, are approved; removal from the register can then be requested |
Older approved accounts may be accepted in certain circumstances, potentially with a request to renew the declaration. Registering the opting-out does not allow the company to remove an auditor who is still needed to complete the 2026 audit.
New companies: opting out at incorporation
Guidance 2/24 expressly distinguishes incorporation from an existing company’s waiver. A company incorporated with a valid opting-out can dispense with a limited audit from its first financial year. It does not need accounts for an earlier year that never existed. The incorporation declaration and supporting documents are prepared with the notary and commercial register.
By contrast, a company incorporated with an auditor and seeking a waiver later follows the procedure for an existing company. Opting out at incorporation must not be confused with retrospectively cancelling an audit requirement.
The waiver remains valid in subsequent years while its conditions are met. Any shareholder or member can request a limited audit no later than ten days before the general meeting: this is opting-in. A change in headcount or circumstances requires the company to review its obligations.
Opting-in and opting-up are different requests
Opting-in: following a waiver, any shareholder may require a limited audit no later than ten days before the general meeting. The meeting must then elect an auditor. Opting-up: shareholders representing at least 10% of the share capital may require an ordinary audit. This separate right should not be confused with the ten-day opting-in deadline. The audit rules apply by analogy to LLCs, including an additional right for a member subject to an obligation to make additional contributions.
Should you opt out just because you can?
Opting out reduces audit fees. In return, shareholders lose an independent external review of the accounts. That review can be useful when an owner is not involved in management, a bank requests it or a new investor is preparing to join.
An audit does not guarantee access to credit. It can nevertheless make discussions easier by providing a clearly defined level of verification. Compare that benefit with the cost and the company’s actual needs.
How to compare two limited audit quotes
Request quotes for the same year and deliverables. Explain whether the accounts will already be finalised, whether the business holds inventory, and whether there are unusual transactions or multiple sites. Check what is included: discussions about adjustments, the report, timing and additional work. A low fee can be misleading if preparing the accounts is charged separately and you have not understood that distinction.
The rules on loss of capital and overindebtedness can still require specific examinations after an audit waiver.
Prepare a file that makes the audit easier
The auditor needs to connect figures to supporting documents and understand significant estimates. Prepare bank reconciliations, customer and supplier balances, inventory records, loan agreements and the fixed asset schedule. Include decisions and commitments that may affect the accounts.
For an old receivable, provide more than the amount. Explain the collection steps, the customer’s responses and the evidence supporting the valuation. For a provision, document the known facts and estimation method. Clear explanations reduce repeated requests and make accounting judgements easier to discuss.
Appoint one person to coordinate questions and document versions. Separate answers based on different files can make the audit file inconsistent even when all the necessary information exists.
Anticipate changes in headcount or structure. An opting-out is not a decision to forget once registered. Changes in the company may require a new assessment of its obligations. Review the position early enough to organise an audit when needed.
Our Swiss small business accounting guide helps you organise year-end work. Give the notes to the annual accounts the same attention as the balance sheet and income statement. Even with an auditor, management remains responsible for preparing the accounts.
For the choice of firm, see our guide to statutory auditors: FAOA licensing and independence.
Make an informed audit decision
Start with the company’s legal obligations, then consider the value of an independent review for its owners and business partners. Pay particular attention to the waiver conditions and deadlines before the year concerned.
We can prepare year-end accounts for your company and the supporting file for a licensed statutory auditor. The audit engagement and independence requirements must be defined separately.
Frequently asked questions
Can an LLC with no employees opt out of an audit?
It appears to meet the headcount condition, but it must also obtain the consent of all members and complete the formalities correctly. Having no employees is not sufficient on its own.
Does opting out remove the requirement to prepare a balance sheet?
No. A Swiss LLC or SA/AG must still prepare annual accounts. Opting out concerns the external audit of those accounts.
Can an existing company opt out after the financial year has ended?
Not to cancel that year’s audit retrospectively. The application must precede the start of the financial year concerned. An opting-out declared at incorporation is a separate case.
What is the difference between opting-in and opting-up?
Opting-in reinstates a limited audit after a waiver, at a shareholder’s request no later than ten days before the general meeting. Opting-up makes the company subject to an ordinary audit, including at the request of shareholders representing at least 10% of the share capital.
Sources and references
- Code of Obligations, Article 727: ordinary audit — English.
- Code of Obligations, Article 727a: limited audit and opting-out — English.
- Federal Audit Oversight Authority: independence — English.
- Federal Commercial Registry Office, guidance 2/24 of 11 October 2024: opting-out and incorporation examples — French.
- Federal Commercial Registry Office, guidance 1/26 of 3 March 2026: opting-out and the end of the auditor’s term — French.
Romain Prieur is a Swiss Certified Public Accountant and founder of Entreprendre.ch. With more than ten years of experience in audit and business advisory in Switzerland, he advises entrepreneurs on company formation, accounting and tax.
