The Swiss Code of Obligations (Swiss CO) establishes the statutory framework for accounting and auditing in Switzerland. Accounting and Financial ReportingAll entities that are not private partnerships or private...

The Swiss Code of Obligations (Swiss CO) establishes the statutory framework for accounting and auditing in Switzerland.

Accounting and Financial Reporting

All entities that are not private partnerships or private enterprises are required to prepare annual financial statements. Except for public enterprises, filing of financial statements is not required in Switzerland.

Listed companies in Switzerland are required to prepare their group financial statements in accordance with IFRS or US GAAP if they are registered on the main market, and in accordance with Swiss GAAP FER at minimum if they are registered on the domestic market. A full set of financial statements for listed companies also includes a group management report. All other corporations of legal entities, such as cooperatives and foundations, subject to any other requirements that may be otherwise specified, have the obligation to prepare their financial statements at minimum in accordance with accounting principles recognized by the Swiss CO (IFRS, IFRS for SMEs, IPSAS, US GAAP, and Swiss GAAP FER).

Although the Swiss Financial Market Supervisory Authority may also impose additional requirements on financial institutions, its provisions are in line with the Swiss CO.

Auditing Requirements

Companies that exceed certain size and revenue thresholds are required to have their financial statements audited. Regardless of their size, all listed companies are subject to a full statutory audit. In addition to the audit of the separate statutory financial statements of parent companies and their affiliates, their group financial statements are also subject to a full audit. Companies below the specified thresholds are subject to statutory limited examination (called a moderate assurance engagement), for which a stand-alone Swiss review standard has been established.

According to the Ordinance of the Federal Audit Oversight Authority on the Oversight of Audit Firms of 2008, financial statements of public companies prepared in accordance with the Swiss CO and Swiss GAAP FER must be audited in accordance with the auditing standards promulgated by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse). EXPERTsuisse adopts the Clarified ISAs issued by the IAASB subject to some additional requirements relevant within Switzerland. Financial statements of public companies prepared under foreign accounting standards must be audited in accordance with ISA issued by the IAASB.

While there appear to be several qualifications for professional accountants in Switzerland, only auditors are regulated. The two auditor designations in Switzerland are Licensed Audit Expert and Licensed Auditor...

While there appear to be several qualifications for professional accountants in Switzerland, only auditors are regulated. The two auditor designations in Switzerland are Licensed Audit Expert and Licensed Auditor. Certified Accountants, Tax Consultants, and other qualifications for accountants wanting to perform professional services do not seem to be regulated.

The Federal Audit Oversight Authority (FAOA) regulates the licensure of both classes of auditors. Licensed Audit Experts who wish to audit financial services companies must also be registered with the Swiss Financial Market Supervisory Authority. The Federal Act on the Licensing and Oversight of Auditors of December 2005, which established the FAOA, sets initial professional development (IPD) and continuing professional development (CPD) requirements for Licensed Audit Experts and Licensed Auditors. The Act grants the FAOA the authority to supervise the activities of auditors and audit firms of public companies and those that voluntarily subject themselves to oversight. Although the FAOA is authorized to carry out investigations and discipline of auditors and firms, as well as set auditing standards for public companies, it relies on the standards issued by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse).

The EXPERTsuisse, a professional accountancy organization with voluntary membership, offers training and certification for Certified Accountants, Tax Consultants, and other professional designations, which are potential pathways to becoming licensed auditors. Universities deliver IPD through accountancy degree programs recognized by the FAOA. It seems that the FAOA delegates to EXPERTsuisse the authority to carry out certification exams and CPD for both categories of licensed auditors. EXPERTsuisse sets ethical requirements for its members and maintains a system of investigation, discipline, and appeals.

The Federal Act on the Licensing and Oversight of Auditors (AOA) of 16 December 2005 regulates the licensing and oversight of individuals and firms providing statutory audit services. It aims at assuring the proper...

The Federal Act on the Licensing and Oversight of Auditors (AOA) of 16 December 2005 regulates the licensing and oversight of individuals and firms providing statutory audit services. It aims at assuring the proper performance and quality of audit services (Article 1, AOA). Under the AOA, the Federal Audit Oversight Authority (FAOA) (Article 28, AOA) is responsible for the licensing of all auditors and audit firms carrying out statutory audits and exercises independent oversight over all audit firms carrying out statutory audits of public companies. It is furthermore responsible for administrative and judicial assistance in international matters of audit oversight. The FAOA is entitled to conduct inspections, to give legally binding instructions to restore an orderly situation, and to impose administrative as well as criminal sanctions. The FAOA has direct and exclusive responsibility for the oversight of audit firms. It is a member of the International Forum of Independent Audit Regulators.

The Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) is the professional accountancy organization and IFAC member in Switzerland. EXPERTsuisse is also a member of the Federation of European...

The Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) is the professional accountancy organization and IFAC member in Switzerland. EXPERTsuisse is also a member of the Federation of European Accountants. EXPERTsuisse is recognized by law as a national professional accountancy organization. EXPERTsuisse has auditors, accountants, tax consultants, technicians, bookkeepers, and students as members. EXPERTsuisse provides initial professional development and continuing professional development for professional accountants. EXPERTsuisse is also a recognized audit and ethics standard setter for all auditors and audit firms in Switzerland.

There are no reported major projects or other initiatives underway...

There are no reported major projects or other initiatives underway.

The Federal Act on the Licensing and Oversight of Auditors of December 2005 established the requirement for mandatory quality assurance (QA) reviews for audits of financial statements of public companies and financial...

The Federal Act on the Licensing and Oversight of Auditors of December 2005 established the requirement for mandatory quality assurance (QA) reviews for audits of financial statements of public companies and financial institutions. According to the Act, the Federal Audit Oversight Authority (FAOA) has the legal mandate for conducting QA reviews. A national quality control standard (QC 1), which is converged with ISQC 1, has been adopted for full-scope statutory audits. It is unclear, however, whether the FAOA’s QA review system is in line with SMO 1 requirements. The FAOA’s QA review system is not required for statutory full-scope audits of private companies. Swiss law requires the development of a peer review QA system for individual practitioners to be implemented by September 2016.

It is unclear if all mandatory audits that are not covered by the FAOA’s QA review system will be included in the peer review system. It is also unclear whether the design of the peer review system is being planned in line with SMO 1 requirements.

Current Status: Partially Adopted

The Federal Act on the Licensing and Oversight of Auditors of December 2005 sets initial professional development (IPD) and continuing professional development (CPD) requirements for Licensed Audit Experts and Licensed...

The Federal Act on the Licensing and Oversight of Auditors of December 2005 sets initial professional development (IPD) and continuing professional development (CPD) requirements for Licensed Audit Experts and Licensed Auditors.

The Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) offers training and certifications that are potentially pathways to becoming a licensed auditor. EXPERTsuisse reports having an ongoing process to adopt the requirements of the IES. Universities deliver IPD through accountancy degree programs recognized by the Federal Audit Oversight Authority (FAOA). It seems that the FAOA delegates to EXPERTsuisse the authority to carry out certification exams and CPD for both categories of licensed auditors.

While it is apparent that the FAOA has adopted some of the IES requirements for auditors, and it is clear that EXPERTsuisse adopts the IES requirements for its members, it remains unclear if all of the IPD and CPD requirements specified by the IES are adopted for all regulated professional accountants in the jurisdiction.

Current Status: Partially Adopted

Under the Federal Act on the Licensing and Oversight of Auditors of December 2005, the Federal Audit Oversight Authority is responsible for setting auditing standards for public companies. Under the Ordinance of the...

Under the Federal Act on the Licensing and Oversight of Auditors of December 2005, the Federal Audit Oversight Authority is responsible for setting auditing standards for public companies. Under the Ordinance of the Federal Audit Oversight Authority on the Oversight of Audit Firms of 2008, financial statements of public companies prepared in accordance with the Swiss Code of Obligations and Swiss GAAP FER must be audited in accordance with auditing standards promulgated by the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse). Financial statements of public companies prepared under foreign accounting standards must be audited in accordance with ISA as issued by the IAASB. EXPERTsuisse-issued auditing standards are also applied in audits other than those of public companies. EXPERTsuisse reports that the 2013 version of the ISA has been translated into German and is being applied.

Current Status: Adopted

The law or regulation that sets ethical requirements in the jurisdiction or requires the adoption of the IESBA Code of Ethics for Professional Accountants is unclear. Although the Swiss Expert Association for Audit, Tax...

The law or regulation that sets ethical requirements in the jurisdiction or requires the adoption of the IESBA Code of Ethics for Professional Accountants is unclear.

Although the Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse) is responsible for adopting ethical requirements for its members, it is unclear if the EXPERTsuisse’s Code is applicable for all auditors, including non-members. EXPERTsuisse reports that its requirements are based on those of the IESBA Code.

It is not clear whether or not EXPERTsuisse has an ongoing process to incorporate amendments to the IESBA Code.

Current Status: Partially Adopted

The law or regulation, if any, that defines public sector accounting standards is unclear.The Swiss Federal Finance Administration (FFA) is responsible for adopting public sector accounting standards for the federal...

The law or regulation, if any, that defines public sector accounting standards is unclear.

The Swiss Federal Finance Administration (FFA) 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.

The FFA decided in 2001 to initiate a project to overhaul the Swiss Confederation’s accounting system, with the first financial statement based on IPSAS to be issued for fiscal 2007 onwards. The government of the State/Canton of Geneva is similarly adopting IPSAS as of 2008 and the State/Canton of Zurich as of 2009. The governments of the States/Cantons of Lucerne and Berne have initiated projects to adopt IPSAS, with effective dates of 2012 and 2013, respectively. All states/cantons should adopt at least a national standard called HAM2, but are allowed to go beyond that and adopt IPSAS. HAM2 is based on the accrual-basis accounting model HAM (1981), but is converged with IPSAS in terms of presentation, recognition, and disclosure. The measurement requirements, however, differ from those of IPSAS.

Current Status: Adopted

The Federal Audit Oversight Authority (FAOA) regulates Licensed Audit Experts, Licensed Auditors, and firms that audit public companies. The Federal Act on the Licensing and Oversight of Auditors of December 2005...

The Federal Audit Oversight Authority (FAOA) regulates Licensed Audit Experts, Licensed Auditors, and firms that audit public companies. The Federal Act on the Licensing and Oversight of Auditors of December 2005 empowers the FAOA to investigate and discipline (I&D) both categories of auditors. It is unclear whether the FAOA’s I&D system is in line with all of the SMO 6 requirements.

There does not appear to be a national law or regulation that sets the legal foundation for the investigation and discipline of Certified Accountants and Tax Consultants. The Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse), a volunteer professional accountancy organization, has an I&D system in place for its members, which includes both categories of auditors, as well as Certified Accountants, among others. The EXPERTsuisse has regulations for the qualifications and conduct of its members, and its I&D mechanisms seem to operate through the Ethics Committee.

While it is clear that a system of investigation, discipline, and appeals exists and is operational for regulated professional accountants in Switzerland, it is unclear whether the systems operated by the FAOA, EXPERTsuisse, and any other institution, incorporate all of the requirements of SMO 6.

Current Status: Partially Adopted

Statutory separate company financial statements must be prepared in accordance with the recognized financial reporting standards as prescribed by the Swiss Code of Obligations. The following accountancy frameworks are...

Statutory separate company financial statements must be prepared in accordance with the recognized financial reporting standards as prescribed by the Swiss Code of Obligations. The following accountancy frameworks are considered to be recognized financial reporting standards: IFRS, IFRS for SMEs, US GAAP, IPSAS, and Swiss GAAP FER.

The Swiss GAAP FER Foundation, an independent private standard setter, establishes Swiss GAAP.

IFRS as issued by the IASB are accepted as reporting standards for listed and non-listed entities. SMEs may use IFRS for SMEs. Neither IFRS nor IFRS for SMEs are required.

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

Current Status: Partially Adopted

Relevant OrganizationsSwiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse)Federal Audit Oversight Authority (FAOA) of SwitzerlandSwiss GAAP FER FoundationRelevant LegislationSwiss Code of...

Relevant Organizations

• Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse)
• Federal Audit Oversight Authority (FAOA) of Switzerland
• Swiss GAAP FER Foundation

Relevant Legislation

• Swiss Code of Obligations
• Federal Act on the Licensing and Oversight of Auditors, December 2005
• Ordinance of the Federal Audit Oversight Authority on the Oversight of Audit Firms, 2008

Relevant Regulations

• Regulations of Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse)

Relevant Publications

• IFRS Foundation. “IFRS Application Around the World—Jurisdictional Profile: Switzerland,” 2015.
• PWC. New Requirements for Accounting and Auditing: All Changes to the Swiss Code of Obligations at a Glance, 2011.
• Crowe Horwath, “Country by Country Financial Reporting and Auditing Framework. Switzerland,” 2014.
• IFIAR. “IFIAR Member Profile—Switzerland,” 2014.
• Deloitte & Touche, IPSASs in Your Pocket, 2013.
• IPSASB. “A Closer Look At: Switzerland,” August 2014.