Ordinary or Limited Audit in Switzerland? Key Differences, Thresholds & Requirements

Which type of statutory audit applies to your Swiss company has real implications for cost, process, and how your financial statements are perceived by external stakeholders. The Swiss Code of Obligations (CO) distinguishes between two types: the ordinary audit (ordentliche Revision) for larger, economically significant companies, and the limited audit (eingeschränkte Revision) for most SMEs. They differ significantly in scope, cost, auditor requirements, and what they signal to shareholders, lenders, and the market.

This article explains who is required to undergo which type of audit, what each one actually involves, how they compare side by side, and what growing companies need to know as they approach the legal thresholds.

What is the difference between an ordinary audit and a limited audit in Switzerland?

The ordinary audit (ordentliche Revision) is a comprehensive statutory examination of a company’s annual financial statements and internal controls. The limited audit (eingeschränkte Revision) is a narrower review focused on whether material errors in the financial statements can be found. Which applies to your company depends on its size and economic significance under the Swiss Code of Obligations (CO), specifically Art. 727 and the articles that follow.

The core difference is the level of assurance provided. An ordinary audit delivers “reasonable assurance” — the auditor positively confirms that the financial statements are correct. A limited audit delivers “limited assurance” — the auditor confirms that nothing came to their attention suggesting the financial statements are wrong. The distinction matters practically: banks, investors, and parent companies often have specific expectations about which standard applies.

Which companies must undergo an ordinary audit?

The obligation to conduct an ordinary audit applies to companies that are economically significant under Swiss law, regardless of their legal form. According to the Federal Audit Oversight Authority, Switzerland has approximately 10,000 ordinary audits per year compared to around 80,000 limited audits, meaning only a small fraction of Swiss companies are subject to the full regime.¹

The ordinary audit thresholds

Under Art. 727 para. 1 no. 2 CO, a company is subject to an ordinary audit if it exceeds two of the following three thresholds in two consecutive financial years:

• Balance sheet total: more than CHF 20 million
• Revenue: more than CHF 40 million
• Full-time equivalent employees: more than 250 on annual average

The two-year rule applies in both directions: in order for a company to return to the limited audit, it must fall below two of the three thresholds for two consecutive financial years.

Practical example: A GmbH with a CHF 25 million balance sheet, CHF 45 million revenue, and 80 employees exceeds two of the three thresholds (balance sheet and revenue). If this is the case in year one and year two, an ordinary audit is required for year two’s financial statements, conducted in practice in the months following year-end.

Other mandatory cases

Irrespective of the size thresholds, certain company types are always subject to an ordinary audit under Art. 727 para. 1 CO:

• Publicly listed companies: companies whose shares or bonds are listed on a stock exchange, or which have issued bonds outstanding
• Companies required to prepare consolidated financial statements under Art. 963 CO: typically parent companies of corporate groups that control one or more subsidiaries and must present group-level accounts
• Opting-up: companies where shareholders holding at least 10% of the share capital formally request an ordinary audit under Art. 727 para. 2 CO
• Companies whose articles of association or a resolution by the general meeting of shareholders provide for an ordinary audit

What does an ordinary audit involve?

An ordinary audit is a thorough, risk-based review of a company’s annual financial statements and the processes behind them.

The auditor must have the qualifications of a licensed audit expert (zugelassener Revisionsexperte), registered with the Federal Audit Oversight Authority (RAB) under Art. 727b CO.

An ordinary audit covers a broad range of procedures:

• Review of the internal control system (ICS): mandated by Art. 728a para. 1 no. 3 CO and carried out in accordance with Swiss Auditing Standard PS 890. The auditor must assess whether a functioning system of internal controls exists and report on it to the board of directors.
• Third-party confirmations: the auditor contacts banks, creditors, and debtors directly to verify balances independently.
• Inventory observation: physical stock counts and asset verification.
• Fraud risk assessment: specific procedures to identify risks of unlawful acts and regulatory violations.
• Detailed sample testing: examination of individual transactions and supporting documentation.

The auditor produces two reports: a comprehensive report to the board of directors covering all findings, weaknesses identified, and recommendations; and a summary report to the general meeting of shareholders containing the audit opinion. If everything checks out, that opinion is a positive assurance: the auditor confirms that the annual financial statements comply with the law and the company’s articles of association.

What does a limited audit involve?

A limited audit is a structured but narrower review of the annual financial statements, based on inquiries, analytical procedures, and selective detail testing. It is the standard audit type for Swiss SMEs that fall below the ordinary audit thresholds.

It is governed by Art. 727a CO, which establishes the obligation, and Art. 729a CO, which defines the scope of procedures. It applies to any AG, GmbH, or cooperative with 10 or more full-time equivalent employees (on annual average) that does not meet the ordinary audit criteria. The auditor’s procedures consist of three types:

• Inquiries: interviews with management and relevant staff about significant transactions, accounting policies, and business developments
• Analytical procedures: year-on-year comparisons of financial statement items to identify anomalies and inconsistencies
• Limited detail testing: spot-checks of selected transactions and supporting documentation

What a limited audit explicitly does not include is the review of the internal control system, third-party balance confirmations, physical inventory observations, or specific fraud detection procedures. These are reserved for the ordinary audit.

The auditor for a limited audit must be a licensed auditor (zugelassener Revisor) registered with the RAB under Art. 727c CO, a lower qualification threshold than the licensed audit expert required for an ordinary audit. You can verify any auditor’s registration status via the RAB public register.

Independence requirements are not as stringent for a limited audit. The same firm can provide both accounting and audit services, provided it implements appropriate organisational and personnel safeguards to ensure the person conducting the audit review is not the same person who prepared the accounts (Art. 729 para. 2 CO). This can be a practical arrangement for Swiss SMEs working with a single fiduciary partner.

The limited audit concludes with a written report to the general meeting of shareholders containing a negative assurance: nothing came to the auditor’s attention suggesting the annual financial statements do not comply with the law and the company’s articles of association. No separate report to the board of directors is required.

Ordinary audit vs. limited audit: a side-by-side comparison

Ordinary audit vs. limited audit

What is the internal control system (ICS) and why does it matter in an ordinary audit?

The internal control system (ICS) is the set of processes, procedures, and controls a company has in place to ensure that its accounting is complete, accurate, and compliant. It covers everything from how invoices are approved and recorded to how access to financial systems is managed and how reconciliations are performed.

In an ordinary audit, the existence and functioning of the ICS is a mandatory area of examination, governed by Swiss Auditing Standard PS 890. The auditor does not design or implement the ICS (that is management’s responsibility) but must assess whether one exists and report their findings to the board of directors. Weaknesses must be flagged, and significant deficiencies can result in a qualified audit opinion — meaning the auditor cannot give a clean sign-off and must formally flag the issue in their report.

Companies that reach the ordinary audit thresholds without having structured their internal controls tend to face significantly higher audit costs and more auditor queries in the first year. For companies using modern, integrated accounting software with digital workflows, clear approval hierarchies, and automated reconciliations, many of the building blocks of a functioning ICS are already in place by design.

It is worth noting that the ICS reviewed in a statutory ordinary audit is distinct from the concept of internal audit as a management function. Internal audit is an ongoing internal activity focused on process improvement and risk management. It is not a legal requirement tied to company size, and is conducted by or on behalf of management rather than by an external auditor.

Opting out, opting up, and opting in: what are the options?

Not all audit obligations are fixed: Swiss law provides several mechanisms that allow companies to change the type of audit they are subject to. Depending on the number of employees and shareholder consent, a company can waive its audit obligation entirely (opting-out), voluntarily upgrade from a limited to an ordinary audit (opting-up), or choose an audit despite having no legal obligation to do so (opting-in).

Opting-out is the full waiver of the statutory audit, available only to companies subject to a limited audit. Under Art. 727a para. 2 CO, companies with fewer than 10 full-time equivalent employees on annual average can waive the limited audit entirely if all shareholders unanimously consent, provided the company does not already exceed the thresholds for an ordinary audit. According to the Federal Statistical Office, nearly 90% of Swiss companies are micro-enterprises with fewer than 10 employees, meaning the majority of Swiss legal entities are in principle eligible to opt out. 

The waiver must be filed with the commercial register before the start of the financial year it applies to — retroactive opting-out has not been permitted since 1 January 2025. Once filed, it carries over to subsequent financial years automatically. However, any shareholder can reverse the opt-out by requesting an audit at least 10 days before the general meeting.

Opting out does not eliminate all scrutiny. Banks and lenders frequently require audited financial statements as a condition for credit, and investors and potential acquirers in due diligence processes almost always expect them. Some companies therefore maintain the limited audit voluntarily even when they legally could opt out (i.e., they “opt in”). 

Opting-in refers to the voluntary adoption of a limited audit by a company that has no legal obligation to have one. For example, a company with fewer than 10 FTE that chooses to maintain an audit to strengthen credibility with banks, investors, or business partners. Creditors may also formally request that a company be audited, which is also referred to as opting-in.

Opting-up is the voluntary upgrade from a limited audit to an ordinary audit, available when shareholders holding at least 10% of the share capital formally demand it under Art. 727 para. 2 CO, or when the company’s articles of association or a general meeting resolution provide for it. Opting-up is sometimes requested by investors, parent companies, or creditors who require the higher assurance that an ordinary audit provides.

How does digital accounting affect the audit process?

Good digital bookkeeping directly reduces the time and cost of any statutory audit. When financial records are clean, well-organised, and digitally accessible, auditors work faster. In an ordinary audit, a structured digital environment also simplifies the mandatory ICS assessment.

Working with a fiduciary that runs fully digital, integrated accounting processes means the financial records are already in the format auditors expect by the time the audit begins, eliminating the last-minute folder preparation and document chasing that drives up audit costs.

For a detailed breakdown of audit costs and the specific factors that drive them, see our guide to audit costs in Switzerland.