Switzerland
The Commission of Experts for Recommendations in Accounting (FER) is a private body responsible for drafting the voluntary Swiss Financial Reporting Standards that are referred to as the Swiss Generally Accepted Accounting Principles (known as GAAP FER). As explained in a 2008 publication by PricewaterhouseCoopers, GAAP FER standards differ from International Financial Reporting Standards (IFRSs). A 2003 FER press release clarified that the FER believes that international standards are too complex and impractical for small and medium-size enterprises (SMEs) and therefore in the future the FER will focus on developing standards more applicable for the needs of the SMEs rather than adopting IFRSs. Per the September 2006 self-assessment prepared by the Swiss Institute of Certified Accountants and Tax Consultants (TK), listed companies adhere to accounting standards stipulated in the Listing Rules issued by the Swiss Exchange (SIX). These rules entail a spectrum of accounting standards and, as explained in the 2006 update on the Deloitte IAS Plus website, most companies listed on the main board of the SIX are required to adhere to IFRSs or U.S. GAAP. Swiss companies that operate domestically are permitted to use either Swiss GAAP FER or the above two options. A 2007 Directive on Requirements for Financial Reporting notes that banks, securities dealers and mortgage credit institutes must comply with additional legal requirements.
KPMG Switzerland website discloses that according to the Swiss Code of Obligations, ordinary audit is mandatory for public companies and companies of economic significance, while SMEs are required to undergo a limited statutory examination. Microenterprises, on the other hand, can forgo audits completely with the approval of shareholders. Audits of non-public companies are conducted in accordance with Swiss Auditing Standards issued by the Institute TK. For public companies, the Federal Audit Oversight Authority (FAOA) established in 2007 defines auditing standards, the application of which depends on the accounting framework used to prepare financial statements. According to a self-assessment prepared in September 2006 by the TK as part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, pronouncements of the International Auditing and Assurance Standards Board (IAASB) are adopted in Switzerland as national standards with modifications to reflect local legal environment. In September 2004, the TK issued new Swiss Auditing Standards which constitute the official Swiss translation of the International Standards on Auditing (ISAs) effective as of June 2003. The IAASB has since revised the ISAs, and the TK's 2006 self-assessment asserts that these revisions will be incorporated in the Swiss standards after the IAASB has finalized its Clarity Project. The TK states that after the completion of the Clarity Project, the organization will cease to issue local standards and together with other German and French speaking IFAC member bodies will translate the Clarified ISAs into Swiss German and Swiss French following the IFAC’s translation policy. As of September 2009, the IFAC website indicates that the translation of the IAASB pronouncements by the TK is “in progress.”
