Accounts must be kept as required by law for the type and scope of the company concerned. They must be kept in an orderly manner and allow identification of business assets, receivables and payables arising from business operations, and profits and losses in each business year.
The law requires that the income statement and the balance sheet be drawn up annually according to the Swiss generally accepted accounting principles, and be complete, clear and easy understood. This means that the financial statements can be prepared, under certain circumstances (ref. below to point 4.3), according to all internationally accepted standards (e.g. US-GAAP, IFRS, Swiss GAAP FER).
The accounts must be kept in one of the national languages or in English and they may be kept in any other currency of significance to the company’s business activities. If they are kept in a foreign currency, the values must also be indicated in Swiss francs.
A company is defined as “large”, when two of the following variables are attained in two successive fiscal years:
“Large” companies must be ordinary audited, and have to prepare a consolidated financial statement conforming either to the Swiss Code Obligations or to recognized standards (e.g. Swiss GAAP, IFRS, US-GAAP). They also have to enclose cash flow statement and a director’s report with additional information.
Only stock exchange listed companies, cooperatives with over 2.000 members and foundations that are subordinated to ordinary audit must prepare the financial statement in accordance with the recognized standards (e.g. Swiss GAAP, IFRS, US GAAP).
The audit requirements do not depend on the legal form of the audited organisation.
Small and medium-sized organisations may undergo a limited statutory audit, which is a full scope audit but with only a negative assurance opinion. Small entities with less than 10 employees may choose to opt out and not have their financial statements audited.
All auditors must register with the Federal Audit Oversight Authority (FAOA) and receive an authorisation to act as “supervised audit firm” (for public companies, full audit), or as “approved audit expert” (large organisations, full audit) or as “approved auditor” (for all other entities, limited statutory audit). FAOA keeps an online register of all authorised auditors indicating their professional authorisation grade.