Switzerland

Member Organizations

Member Organization Associate Other PAOs

  EXPERTsuisse - Swiss Expert Association for Audit, Tax and Fiduciary

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The financial reporting framework in Switzerland is established under the Swiss Code of Obligations (Swiss CO), as amended in 2017. The Swiss CO requires all companies—other than public interest entities (PIEs), which are defined as listed companies and financial institutions—to prepare financial statements in accordance with IFRS Standards, IFRS for Small- and Medium-sized Entities (SMEs), US GAAP, and Swiss GAAP FER. PIEs are required to prepare their group financial statements in accordance with IFRS or US GAAP if they are registered on a major stock exchange, and in accordance with Swiss GAAP FER if they are registered on the domestic market. The Swiss GAAP FER Foundation, an independent private standard-setter, establishes Swiss GAAP FER.

    In addition to complying with the requirements of the Swiss CO, PIEs are subject to additional financial reporting requirements issued by the Swiss Financial Market Supervisory Authority, which are in line with the Swiss CO.

    A mandatory audit is required for all PIEs and companies that exceed two of the three following thresholds: (a) CHF 20 million of total assets; (b) CHF 40 million of total revenue; and/or (c) 250 employees. Companies below the specified thresholds are subject to statutory limited examination (known as a moderate assurance engagement), for which a stand-alone Swiss review standard has been established.

    Under the Federal Act on the Licensing and Oversight of Auditors of 2005, the Federal Audit Oversight Authority (FAOA) is responsible for setting auditing standards for PIEs. Under an FAOA’s Ordinance on the Oversight of Audit Firms of 2008, financial statements of PIEs prepared in accordance with the Swiss CO and Swiss GAAP FER must be audited in accordance with auditing standards issued by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse). EXPERTsuisse has developed national auditing standards that are converged ISA, with modifications (add-ons) for Swiss-specific issues. As of 2019, the 2016–2017 ISA has been translated into German and French and is being incorporated into national requirements.

    As reported by EXPERTsuisse, FAOA has issued specific rules for listed companies, which are required to prepare financial statements in accordance with IFRS, must prepare their audits with ISA, as issued by the IAASB. Companies preparing their financial statements in accordance with US GAAP must prepare their audits in accordance with the U.S. Public Company Oversight Board (PCAOB) requirements. Lastly, listed companies preparing financial statements based on Swiss GAAP FER, are required to follow Swiss national auditing standards.

  • Regulation of Accountancy Profession

    Only auditors are regulated at the state level under the Federal Act on the Licensing and Oversight of Auditors (AOA) of 2005. The Act establishes and outlines the roles of the audit oversight authority—the Federal Audit Oversight Authority (FAOA). Through the Act, initial and continuing professional development (IPD and CPD) requirements are also outlined for auditors in Switzerland.

    Universities and the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) have a role in implementing IPD requirements for auditors. To be eligible to practice as an auditor, individuals must: have a university degree, have work experience of at least three years, and pass a final assessment. Subsequently, candidates must be registered with the FAOA to practice.

    The FAOA, as the oversight authority for the audit profession, has the following responsibilities:(i) the approval and registration of auditors and audit firms; (ii) the adoption of audit standards for public interest entities (PIEs) and professional ethics standards for auditors; (iii) establishing a quality assurance system; and (iv) developing an investigative and disciplinary system.

    In addition to auditors, there are several other qualifications—i.e. certified accountants, tax expert, fiduciary experts, certified experts in accounting and controlling, among others—for professional accountants in Switzerland but none are regulated at the state level. Other professionals may voluntary join a professional accountancy organization (PAO) and be self-regulated through the membership requirements of the PAO. The EXPERTsuisse, a PAO with voluntary membership, carries out the following activities: (i) maintaining a registry of its members; (ii) administering the certification examination of auditors; (iii) establishing and enforcing CPD requirements for its members; (iv) issuing audit standards for auditors providing services to non-PIEs; (v) setting ethical requirements for its members; and (vi) implementing an investigation and discipline system for its members.

  • Audit Oversight Arrangements

    The Federal Act on the Licensing and Oversight of Auditors (AOA) of 2005 recognizes the Federal Audit Oversight Authority (FAOA) as an independent, non-governmental entity responsible for the oversight of the audit profession. The FAOA is a member of the International Forum of Independent Audit Regulators.

    The FAOA, as the oversight authority for the audit profession, has the following responsibilities:(i) the approval and registration of auditors and audit firms; (ii) the adoption of audit standards for public interest entities and professional ethics standards for auditors; (iii) establishing a quality assurance system; and (iv) developing an investigative and disciplinary system.

  • Professional Accountancy Organizations

    The Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse)

    EXPERTsuisse is a voluntary membership PAO recognized by law and was founded in 1925. EXPERTsuisse carries out the following activities: (i) maintaining a registry of its members; (ii) administering the certification examination of auditors; (iii) establishing and enforcing CPD requirements for its members; (iv) issuing audit standards for auditors providing services to non-PIEs; (v) setting ethical requirements for its members; and (vi) implementing an investigation and discipline system for its members. EXPERTsuisse’s membership includes auditors, accountants, tax consultants, technicians, bookkeepers, and students.

    In addition to being an IFAC Member, EXPERTsuisse is also a member of Accountancy Europe.

    Other PAOs

    The Swiss Fiduciary Association (Treuhand|Suisse), the Institute of Internal Auditing Switzerland (IIAS) and the Swiss Association of dipl. Experts in accounting and controlling (veb.ch) are other PAOs in the country that develop training activities, offer certifications, and promote improvements to professional practices.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    In Switzerland, a mandatory quality assurance (QA) review system is required only for all statutory audits of financial statements. The Federal Audit Oversight Authority (FAOA) has the responsibility for carrying out QA reviews in accordance with the Federal Act on the Licensing and Oversight of Auditors (AOA) of 2005.

    Public interest entities (PIEs) include listed companies and financial institutions. In Switzerland, the five largest audit firms operating in the jurisdictions are inspected on an annual basis. Other PIE audit firms are inspected every three years (or five years for firms providing auditing services to financial intermediaries who are directly subordinated to the Swiss Financial Market Supervisory Authority). In addition, sole practitioners registered at FAOA are subject to peer reviews under the FAOA monitoring. The Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) reports that the FAOA’s QA review system is in line with the best practices of the SMO 1.

    In addition, the Swiss Code of Obligations (Swiss CO), as amended in 2017, requires audit firms to have a quality control system in place. EXPERTsuisse has issued a national quality control standard (QS1), converged with ISQC 1, that has been endorsed by FAOA.

    Current Status: Adopted

  • International Education Standards

    The Federal Act on the Licensing and Oversight of Auditors (AOA) of December 2005 sets initial and continuing professional development (IPD and CPD) requirements for auditors in Switzerland.

    Universities and the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) have a role in implementing IPD requirements for auditors. To be eligible to practice as an auditor, individuals must: have a university degree, have work experience of at least three years, and pass a final assessment. Subsequently, candidates must be registered with the FAOA to practice.

    EXPERTsuisse offers training and certifications that are a pathway to becoming a licensed auditor. EXPERTsuisse reports having an ongoing process to review the requirements of the IES and that the revised IES requirements have been incorporated.

    In accordance with AOA, all auditors are required to complete 120 hours of CPD over a two-year rolling period.

    Current Status: Adopted

  • International Standards on Auditing

    Under the Federal Act on the Licensing and Oversight of Auditors of 2005, the Federal Audit Oversight Authority (FAOA) is responsible for setting auditing standards for public interest entities (PIEs). Under an FAOA’s Ordinance on the Oversight of Audit Firms of 2008, financial statements of PIEs prepared in accordance with the Swiss CO and Swiss GAAP FER must be audited using auditing standards issued by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse).

    As reported by EXPERTsuisse, FAOA has issued specific rules for listed companies, which are required to prepare financial statements in accordance with IFRS, must prepare their audits with ISA, as issued by the IAASB. Companies preparing their financial statements in accordance with US GAAP must prepare their audits in accordance with the U.S. Public Company Oversight Board (PCAOB) requirements. Lastly, listed companies preparing financial statements based on Swiss GAAP FER, are required to follow Swiss national auditing standards.

    EXPERTsuisse has developed national auditing standards that are converged with ISA, with modifications (add-ons) for Swiss-specific issues. EXPERTsuisse reports that it has an ongoing system in place to incorporate new and revised ISA. The 2016–2017 ISA has been translated into German and French and is being incorporated into national requirements.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    Ethical requirements for auditors in Switzerland are established in the Swiss Code of Obligations (Swiss CO), as amended in 2017, and the Federal Act on the Licensing and Oversight of Auditors of 2005. The legislation refers only to independence requirements for auditors, which as reported by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse), are aligned with the IESBA requirements.

    Auditors and other professionals that voluntarily join a professional accountancy organization (PAO) are self-regulated through the membership requirements of the PAO. EXPERTsuisse has developed its own code of ethics based on the 2016 IESBA Code of Ethics.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Swiss Federal Finance Administration (FFA), under the authority of the Federal Department of Finance, is responsible for adopting public sector accounting standards for the federal government, while the governments of the states or cantons are responsible for adopting public standards in their jurisdictions. IPSAS have been adopted by reference in Switzerland through the Financial Budget Ordinance.

    Current Status: Adopted

  • Investigation and Discipline

    The Federal Audit Oversight Authority (FAOA) has the responsibility for establishing a mandatory investigative and disciplinary (I&D) system for auditors, in accordance the Federal Act on the Licensing and Oversight of Auditors (AOA) of 2005. Accordingly, the FAOA has established an I&D system. In addition, the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse), has established its own I&D system for its members.

    EXPERTsuisse assessed FAOA’s and its own I&D systems against the best practices of SMO 6 and confirmed that both systems meet the SMO 6 benchmarks.

    Current Status: Adopted

  • International Financial Reporting Standards

    In Switzerland, accounting standards are established by the Swiss Code of Obligations (Swiss CO), as amended in 2017. The Swiss CO requires all companies—other than public interest entities (PIEs), which are defined as listed companies and financial institutions—to prepare financial statements in accordance with IFRS Standards, IFRS for Small- and Medium-sized Entities (SMEs), US GAAP, and Swiss GAAP FER. PIEs are required to prepare their group financial statements in accordance with IFRS or US GAAP if they are registered on a major stock exchange, and in accordance with Swiss GAAP FER if they are registered on the domestic market. The Swiss GAAP FER Foundation, an independent private standard-setter, establishes Swiss GAAP FER.

    In addition to complying with the requirements of the Swiss CO, PIEs are subject to additional financial reporting requirements issued by the Swiss Financial Market Supervisory Authority, which are in line with the Swiss CO.

    Standards and amendments are automatically adopted as and when issued by the IASB. The IFRS Foundation makes available translations in French, German, and Italian, all of which can be used in Switzerland.

    Current Status: Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 10/2019
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