If an auditor accepts the task of examining possible excess debt, he or she is subject to significant risk: Pursuant to art. 725 para. 3 Swiss CO, the auditor is subject to the same reporting requirements as if he or she were statutory auditor of the company. If, for instance, the board of directors neglects to inform the courts in case of excess debt, the appointed auditor has to do this in its place. Experience has shown that company finances are also tight in critical debt situations – so the newly appointed auditor has to anticipate difficulties settling the receivables for the auditing services carried out.
Auditing the interim balance sheet
Smaller companies which are not subject to ordinary audits and do not employ more than 10 employees in full-time positions on average over the business year can forego the limited audit (opting-out). This option was created by legislators with the introduction of the currently applicable auditing law from 1 January 2008.
If a company which makes use of this right has a justified concern regarding excess debt pursuant to art. 725 para. 2 Swiss CO, the board of directors has to appoint a licensed auditor to review the interim balance sheet produced. The auditor produces an audit report for the attention of the board of directors, within which he or she provides an opinion of whether the company (obviously) has excess debt or not.
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Project Lead
Daniel Carotta
+41 44 533 76 00
PRÜFAG Wirtschaftsprüfung AG - Badenerstrasse 141 - Postfach – 8036 Zurich - Phone +41 44 533 76 00 - info@pruefag.ch
PRÜFAG Lohnbuchkontrollen AG - Badenerstrasse 141 - Postfach – 8036 Zurich - Phone +41 44 533 76 00 - info@pruefag.ch
IAPA is a global association of independent accountancy and business advisory firms that aims to support its members in providing their clients with a diverse range of professional, comprehensive and cost-effective business solutions, regardless of sector or location, to realise their international objectives. IAPA has over 200 member firms in some 70 countries and ranks amongst the top 25 global accounting organisations whose membership annual turnover is over 1 billion US$.
